Corporate Income Tax

Generally, corporations carrying on business through a permanent establishment in Ontario are subject to both federal and Ontario corporate income taxes. The tax rates apply to taxable income allocated to Ontario.

General rate

The Ontario General corporate income tax rate is currently 11.5%.

 
Period Rate
July 1, 2011 onwards 11.5%
July 1, 2010 to June 30, 2011 12.0%
Prior to July 1, 2010 14.0%

Lower rates

Small Business Deduction

The Ontario small business deduction (SBD) reduces the corporate income tax rate on the first $500,000 of active business income of Canadian‑controlled private corporations (CCPCs). Effective January 1, 2018, the lower rate of Ontario corporate income tax is reduced from 4.5 per cent to 3.5 per cent.

While the federal government announced in 2018 that it is phasing out the $500,000 small business limit for corporations that earn between $50,000 and $150,000 of passive investment income in a taxation year, Ontario is not paralleling this phase‑out.

Ontario does parallel the federal SBD phase‑out where a CCPC's (and associated groups of CCPCs) taxable capital is between $10 million and $15 million. CCPCs (and associated groups of CCPCs) with taxable capital of $15 million or more are no longer eligible for the lower rate of corporate income tax on the first $500,000 of active business income.

Where a corporation assigns any portion of its federal business limit to another corporation, the corporation's Ontario business limit is also reduced by the same amount by which the federal business limit is reduced.

More about the Ontario small business deduction

Manufacturing and Processing Tax Credit

Corporations involved in manufacturing and processing, fishing, farming, mining and logging may qualify for a tax credit that reduces the corporate income tax rate to 10 per cent.

More about the Ontario tax credit for manufacturing and processing

Contact the Canada Revenue Agency

The Canada Revenue Agency administers Ontario's corporate income tax, corporate minimum tax, and the special additional tax on life insurers. Contact the agency with your questions at 1‑800‑959‑5525 or 1‑800‑665‑0354 for teletypewriter (TTY).

Canada Revenue Agency - Ontario - Provincial corporation tax

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