Tax Guide Canada
Financial Year
- Individuals: Calendar year (Jan 1–Dec 31); returns due April 30; June 15 filing for self‑employed (payment due Apr 30).
- Corporations: Fiscal period up to 53 weeks; T2 return due within 6 months of year‑end.
Currency – Canadian dollar (CAD)
Corporate Tax Summary
- Residence: Incorporated in Canada (deemed) or central management & control in Canada.
- Basis: Residents taxed on worldwide income; non‑residents on Canadian‑source and PE‑attributable income; capital gains on taxable Canadian property.
- Federal net general rate: 15%. CCPC small‑business rate: 9% on eligible active income up to the business limit.
- Permanent establishment (PE): fixed place of business, resource sites, construction projects (time thresholds), dependent agents concluding contracts.
- Branch profits tax: 25% on after‑tax profits not reinvested in Canada (treaty reductions apply; some treaties include thresholds/exemptions).
- Withholding tax (Part XIII): default 25% on passive income (dividends, interest, royalties), reduced by treaty.
Provincial/Territorial Corporate Income Tax Rates (illustrative)
| Province/Territory | Lower (SBD) | Higher (General) | Business Limit |
| British Columbia | 2.0% | 12.0% | $500,000 |
| Alberta | 2.0% | 8.0% | $500,000 |
| Saskatchewan | 1.0% | 12.0% | $600,000 |
| Manitoba | 0.0% | 12.0% | $500,000 |
| Ontario | 3.2% | 11.5% | $500,000 |
| Quebec | 3.2% | 11.5% | $500,000 |
| New Brunswick | 2.5% | 14.0% | $500,000 |
| Nova Scotia | 1.5% | 14.0% | $700,000 |
| Prince Edward Island | 1.0% | 15.0% | $600,000 |
| Newfoundland & Labrador | 2.5% | 15.0% | $500,000 |
| Northwest Territories | 2.0% | 11.5% | $500,000 |
| Nunavut | 3.0% | 12.0% | $500,000 |
| Yukon | 0.0% | 12.0% | $500,000 |
Individual Tax Summary
Residents taxed on worldwide income; non‑residents on Canadian‑source income (treaty relief may apply).
2025 federal brackets: lowest rate reduced mid‑year from 15% to 14% (effective blended ~14.5%); higher brackets at 20.5%, 26%, 29%, 33% per indexed thresholds.
Filing: separate returns (no joint filing); standard deadlines noted above.
GST/HST
Rates by province/territory:
| Jurisdiction | GST | PST/QST | HST | Total |
| Ontario | 13% | 13% | ||
| Nova Scotia | 14% | 14% | ||
| New Brunswick | 15% | 15% | ||
| Newfoundland & Labrador | 15% | 15% | ||
| Prince Edward Island | 15% | 15% | ||
| Quebec | 5% | 9.975% | 14.975% | |
| British Columbia | 5% | 7% | 12% | |
| Manitoba | 5% | 7% | 12% | |
| Saskatchewan | 5% | 6% | 11% | |
| Alberta | 5% | 5% | ||
| Northwest Territories | 5% | 5% | ||
| Nunavut | 5% | 5% | ||
| Yukon | 5% | 5% |
Registration threshold: small supplier at CAD 30,000 (one quarter or any four consecutive quarters).
Place‑of‑supply: rate depends on where the supply is made (goods, services, intangibles, real property rules).
Filing frequency: annual/quarterly/monthly depending on annual taxable supplies; most registrants must e‑file.
Payroll & Selected Property Transfer Taxes
CPP (2025): employee/employer 5.95% up to YMPE CAD 71,300 (max CAD 4,034.10 each). CPP2 at 4% on earnings between CAD 71,300 and 81,200 (max CAD 396 each).
EI (2025): federal rate 1.64% up to CAD 65,700 (max employee CAD 1,077.48; employer 1.4×). Quebec EI rates differ.
Ontario Land Transfer Tax: progressive up to 2.5% (plus Toronto municipal LTT mirroring provincial brackets; luxury surcharges apply at high values).
BC Property Transfer Tax: 1% (≤ CAD 200k), 2% (CAD 200k–2M), 3% (> CAD 2M) plus additional 2% on residential value over CAD 3M; exemptions exist (e.g., first‑time buyer thresholds; certain rental projects).
Non‑Resident Compliance & Reporting
Part XIII WHT: default 25% on dividends, interest, royalties, rents; reduced by treaty (post‑MLI reservations/notifications may affect outcomes).
Reg. 105: 15% withholding on gross payments for services rendered in Canada by non‑residents (file T2 to reconcile).
NR4: withholding, remitting, and reporting requirements for payers to non‑residents.
Last updated: 14.01.2026