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Saskatchewan, from 2% to 12%, in
British Columbia from 2% to 12%, in Nunavut from 3% to 12%, in the Northwest Territories, from 4% to 11.5%, Alberta 8% and in Yukon from 2% to 12%. In most cases, the provinces and territories have two rates of income tax—the lower rate and the higher rate. Businesses that are eligible for the federal small business deduction (SBD) are also eligible for a lower corporate tax rate at the provincial and territorial levels.
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includes businesses engaged in manufacturing and processing (M&P) with income greater than $ 500,000 that are not eligible for federal SBD (%); and the third includes general income businesses, with non-M&P income, that are not eligible for SBD (%). Québec has three levels—the rate for the first level is c. 4% to 5%, for the second level it is 11.50%, and for the third level it is 11.50%.
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According to a June 1, 2020 report, there are two or occasionally three levels of corporate taxes in the provinces and territories—the first includes small businesses, with income generally up to $ 500,000, that are eligible for the "small-business deduction" (SBD); the second (where it exists)
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Corporate taxes in
Newfoundland and Labrador corporate tax rates span from 3 per cent at the lowest rate to 15 per cent at highest rate; in Nova Scotia from 3% to 16%, in New Brunswick from 2.5% to 14%, in Prince Edward Island from 3%to 16%, in Ontario from 3.2% to 11.5%, in Manitoba 12% in
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New rules introduced in 2018, are based on the CCPCs "Adjusted
Aggregate Investment Income" (AAII)—passive investment income—and "tie SBD eligibility to investment income earned by associated corporations." Under these new rules, taxes cannot be "avoided by using a holding company."
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is income from "fixed income investments", "dividend-paying stocks", interest, capital gain, rent, royalties and other earnings that are not directly related to the corporation's active main business income. This passive income can be significant for large corporations.
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Corporate tax in Canada § Provincial and territorial corporate tax rates
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rate is 28%. Additionally, each province or territory operates its own
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334:"Provincial corporate income tax rates for active business income"
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31:. As of 2019, the small business tax rate is 9% The general
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A small business in Canada is defined as a
Canadian-based
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Small businesses are allowed to claim a "small business
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or similar provincial legislation) with fewer than 100
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437:Arruda, Mark L. (February 6, 2019).
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476:Corporate taxation in Canada
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279:"Corporation tax rates"
265:"Corporation tax rates"
21:small business tax rate
360:Cite journal requires
47:Further information:
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481:Taxation in Canada
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339:. June 1, 2020: 2
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95:" under the
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82:CA$ 500,000
68:corporation
62:Definitions
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390:2016-07-26
248:References
84:in annual
80:and under
27:paid by a
93:deduction
78:employees
449:June 30,
399:cite web
343:June 30,
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25:tax rate
23:is the
314:. 2020
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