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(6) A general tax rate reduction is available on qualifying income. Income that is eligible

for other reductions or credits, such as small business income, M&P income and
investment income subject to the refundable provisions, is not eligible for this rate
reduction. The general rate reduction does not apply to the portion of the taxable income
of a corporation earned from a “personal services business” for taxation years that begin
after October 31, 2011.

(7) The refundable tax of 6

% of a CCPC’s investment income and capital gains, as well as

20% of such income that is subject to regular Part I tax, is included in the corporation’s

Refundable Dividend Tax on Hand (RDTOH) account. When taxable dividends (eligible and

non-eligible) are paid out to shareholders, a dividend refund equal to the lesser of 33

of the dividends paid or the balance in the RDTOH account is refunded to the corporation.

(8) British Columbia’s general corporate tax rate increased to 11% (from 10%) effective

April 1, 2013.

(9) Saskatchewan introduced a tax rebate in 2012 that generally reduces the general

corporate income tax rate on income earned from the rental of newly constructed
qualifying multi-unit residential projects by 10%. The rebate is generally available for a
period of 10 consecutive years for rental housing that is registered under a building permit
dated on or after March 21, 2012 and before January 1, 2014, and available for rent before
the end of 2016.

(10) Manitoba's small business income threshold will increase to $425,000 (from $400,000) on

January 1, 2014.

(11) New Brunswick’s general corporate tax rate increased to 12% (from 10%) effective

July 1, 2013.

(12) Nova Scotia’s small business rate decreased to 3.5% (from 4.0%), effective

January 1, 2013 and will decrease to 3.0% (from 3.5%) effective January 1, 2014. Nova
Scotia's small business income threshold will also decrease to $350,000 (from $400,000)
effective January 1, 2014.

(13) Prince Edward Island’s small business rate increased to 4.5% (from 1%) effective

April 1, 2013.

(14) The Yukon Territory provides a manufacturing and processing tax credit that effectively

reduces the corporate tax rate on the corporation’s Canadian manufacturing and
processing profits earned in the year in the Yukon to 2.5%.

Combined Federal and Provincial/Territorial Tax Rates for Income Earned by a CCPC

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Current as of September 30, 2013