(3) The general corporate tax rate applies to active business income earned in excess of the 

small business income threshold. 

(4) Nova Scotia’s small business rate decreased from 4% to 3.5% effective January 1, 2013 

and will decrease to 3% effective January 1, 2014. The small business income threshold 

will also decrease to $350,000 (from $400,000) effective January 1, 2014.

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

April 1, 2013.

(6) The federal and provincial tax rates shown in this table apply to investment income earned 

by a CCPC other than capital gains and dividends received from Canadian corporations. 

The rates that apply to capital gains are one-half of the rates shown in the table. Dividends 

received from Canadian corporations are deductible in computing regular Part I tax, but 

may be subject to Part IV tax, calculated at a rate of 33

1

/

3

%.

(7) 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 taxable income of a corporation 

earned from a “personal services business” for taxation years that begin after  

October 31, 2011.

(8) Corporations that derive at least 10% of their gross revenue for the year from 

manufacturing or processing goods in Canada for sale or lease can claim the manufacturing 

and processing (M&P) deduction against their M&P income. The M&P calculation is 

based on income that is not eligible for the small business deduction. CCPCs that earn 

income from M&P activities are subject to the same rates as those that apply to general 

corporations. 

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

April 1, 2013.

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

July 1, 2013.

Substantively Enacted Income Tax Rates for Income Earned by a CCPC 

 

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Current as of September 30, 2013

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