(1) What is corporation tax rates in Canada?

According to CRA, the corporation tax rates for these years as following:

federal tax rates:

The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement. For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%. For the other corporations, the net tax rate is decreased as follows:

  • 19% effective January 1, 2009
  • 18% effective January 1, 2010
  • 16.5% effective January 1, 2011
  • 15% effective January 1, 2012

Provincial or territorial rates:

Generally, provinces and territories have two rates of income tax – a lower rate and a higher rate.

Lower rate: The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit.

Higher rate: The higher rate applies to all other income.

The following table shows the income tax rates for provinces and territories (except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA).These rates are in effect on January 1, 2012, and may change during 2012.

Lower rate Higher rate
Newfoundland and Labrador 4% 14%
Nova Scotia 4% 16%
Prince Edward Island 1% 16%
New Brunswick 4.5% 10%
Ontario 4.5% 11.5%
Manitoba nil 12%
Saskatchewan 2% 12%
British Columbia 2.5% 10%
Yukon 4% 15%
Northwest Territories 4% 11.5%
Nunavut 4% 12%


(2) What is self-employeed tax rates in Canada?

(3) Differences between self-employeed and incorporated?

(4) Should I incorporate my company?

(5) Are there more paper works if my company incorporated?



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