Canada Corporate Income Tax
Detailed corporate income tax rates and rules for Canada in 2026.
Canada imposes a federal corporate income tax rate of 15% on business income. Provinces and territories levy additional corporate taxes, typically ranging from 8% to 16%, bringing the combined federal-provincial general corporate tax rate to approximately 23% to 31% depending on the jurisdiction. The average combined rate is roughly 26.5%. Canadian-controlled private corporations (CCPCs) earning active business income up to $500,000 qualify for the small business deduction, reducing the federal rate to 9%. Provincial small business rates further reduce the combined rate for qualifying income, often to between 9% and 12.2%.
Standard Rate
15%
Small Business Rate
9%
Additional Notes
The small business deduction is available to Canadian-controlled private corporations (CCPCs) on the first $500,000 of active business income, provided the corporation's taxable capital employed in Canada does not exceed $10 million (with a phase-out up to $50 million). The federal government also applies a 10.67% refundable tax on investment income earned by CCPCs (the Additional Refundable Tax), which is intended to integrate corporate and personal taxation. Manufacturing and processing income may qualify for reduced provincial rates in some jurisdictions. Canada also has a Scientific Research and Experimental Development (SR&ED) tax incentive program offering investment tax credits of 15% to 35% on qualifying R&D expenditures.
How Canada Corporate Tax compares
Canada’s corporate tax rate of 26.5% is the 65th highest of 203 countries TaxAtlas tracks, above the global average of 22.2% and North America’s regional average of 22.3%.
