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Capital Tax Rates—Financial Institutions
1
Federal
Part VI Tax
2
Sask.
3
Man.
4
Ont.
5
Type of Entity
Bank
ü
ü
ü
Loan and trust
ü
ü
ü
Life insurance
ü
Investment dealer
ü
Tax rates
10
2012
1.25%
0.7/3.25%
3.0/4.0%
1.25%
2013
1.25
0.7/3.25
4.0/5.0
1.25%
2014
1.25
0.7/3.25
5.0
1.25%
Capital deduction
or exemption
$1billion
$10 + $10
million
$10
million
$10 million
+ certain
adjustments
Allocation of capital
deduction or
exemption among
related companies
ü
ü
ü
Notes
(1) Credit unions are no longer subject to provincial capital tax.
(2) Financial institutions for Part VI tax purposes also include certain holding companies. The
amount of Part VI capital tax payable is reduced by the corporation’s income tax payable
under Part I.
(3) Effective for taxation years ending on or after November 1, 2009, all financial institutions that
previously qualified for the lower corporate capital tax rate of 0.7% (for its taxation year ending
on or after November 1, 2008 and before November 1, 2009) will not be subject to the high
capital tax rate of 3.25% on the first $1.5 billion of their taxable capital. As a result, a tax rate
of 0.7% will apply on the first $1.5 billion of taxable capital, and a rate of 3.25% will apply on
taxable capital in excess of $1.5 billion. However, if the taxable capital of the financial institution
exceeded $1.5 billion for its taxation year ending on or after November 1, 2008 and before
November 1, 2009, the entire amount of taxable capital is subject to the 3.25% rate.
Saskatchewan’s $10 million capital exemption is available to all corporations. An additional
exemption of up to $10 million is available to companies that pay all or a portion of their
salaries and wages to employees of a permanent establishment in the province.
(4) Effective for fiscal years ending after April 12, 2011, bank, trust and loan companies with
taxable paid up capital of less than $4 billion are exempted from capital tax. Effective for
taxation years ending after April 17, 2012, the capital tax rate is 4%. The 2013 Manitoba
budget increased the capital tax rate to 5% (from 4%) for taxation years ending after April
16, 2013.
(5) Ontario eliminated its capital tax on most financial institutions on July 1, 2010. Life
insurance corporations that carry on business in Ontario must pay a capital tax equal to
1.25% of their taxable capital allocable to Ontario. The capital allowance of $10 million is
adjusted depending on the company’s taxable capital. The capital tax may be reduced by
the company’s Ontario income or corporate minimum tax payable for the year.
Current as of September 30, 2013
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