Investor Presentaiton
CORPORATE LAW
BY ALAIN RANGER
BRAZIL - CANADA COMPARATIVE LAW
controlled private corporations is 26.5% for general active business
income. There are separate rates for general active business
income, manufacturing and processing income, investment
income and for Canadian-controlled private corporations. A non-
resident corporation pays tax on income earned in Canada, subject
to certain tax treaty concessions.
An abatement is allowed against federal tax in an amount equal to
10% of the corporation's taxable income earned in the Canadian
provinces. This abatement is intended to compensate partially for
the provincial tax burden.
Provincial taxes vary from 11% to 16% (again for general active business
income), and generally a corporation is liable to tax in a province only if
it has a permanent establishment in that province. Where a corporation
has business income attributable to permanent establishments in more
than one province, such income is allocated among those permanent
establishments and is subject to tax in those provinces in which the
permanent establishments are located.
In 2016, the combined standard federal-provincial corporate income
tax rates on taxable income ranges from 26% to 31% on general active
business income for non-CCPCs.
The following tables present a snapshot of the applicable tax rates for 2016:
Combined Federal and Provincial Income Tax Rates for Income Earned by a
Canadian-Controlled Private Corporation (CCPC)
Jurisdiction
Québec
Ontario
Alberta
British Columbia
Small Business Income
up to $500,000
General Active
Business Income
Investment Income
18,5%
26,9%
50,6%
15%
26,5%
50,2%
13,5%
27%
50,7%
13 %
26%
49,7%
Combined Federal and Provincial Income Tax Rates for
Income Earned by a Corporation other than a CCPC
Jurisdiction
Québec
Ontario
Alberta
British Columbia
General Active Business Income
(B) Determination of Residence
Investment Income
26,9%
26,9%
26,5%
26,5%
27%
27%
26%
26%
A corporation incorporated in Canada after April 26, 1965 is deemed to
be resident in Canada. A non-resident corporation may be considered to
be resident in Canada if its central management and control is in Canada.
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