Other corporate income tax issues
This collection agreement also resulted in some other changes to the current Ontario tax
system. These changes include the following:
• Management fees—the add-back of certain management fees, rents, royalties and similar
payments to non-residents of Canada was eliminated
• Ontario tax credit for R&D expenses—the Ontario deduction for the federal investment tax
credit (ITC) that relates to Ontario R&D was replaced with a 4.5% non-refundable Ontario
tax credit on R&D expenses incurred in Ontario.
Harmonization of other Ontario corporate taxes
Ontario capital tax—Under the federal/Ontario tax collection agreement, Ontario’s capital tax
base was harmonized with the federal Large Corporations Tax (LCT) base for taxation years
ending after 2008. Ontario’s capital tax for corporations other than financial institutions was
eliminated on July 1, 2010.
Ontario’s capital tax for financial institutions, which was generally harmonized with the LCT
rules before the federal/Ontario tax collection agreement came into effect, was eliminated
on July 1, 2010 for financial institutions other than life insurance corporations (see the table
"Capital Tax Rates—Financial Institutions").
Ontario CMT—The CRA also administers Ontario’s CMT regime under the tax collection
agreement for taxation years ending after 2008 (see the table "Ontario Corporate Minimum Tax
(CMT)—At a Glance").
Ontario Harmonization / 97
Current as of September 30, 2013
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