Blogs & Comment

Provinces with lowest corporate tax rates

If you are thinking of becoming self-employedand have some flexibility on where you locate within Canada, you might want to take into consideration provinces with the lowest corporate tax rates.
Some provinces give new businesses a corporate tax holiday for the initial years after incorporation. According to the Investors Group website, they are: Quebec, Nova Scotia, Newfoundland & Labrador and British Columbia.
The best deal, though,for small business corporations appears to be Manitobas permanent 0% tax (effective Dec, 31, 2010) on active business income under $400,000. Then come PEI (now 1%), B.C. (2.5%) and Alberta (3%) taxes on active business income under $500,000, according to a table on the website.
For businesses above the small business threshold of $400,000 to $500,000, the province with the lowest corporate tax rate is Alberta, at 10%. But New Brunswick will move to 11% mid-2012 and to 8% mid-2012. B.C. is moving to 10% in early 2011 and Ontario has plans to go from 12% as of mid-2010 and to 10% as of mid-2013.
And of course, in terms of having to remit sales taxes, Alberta is one of the best provinces to locate. After July 1, 2010, when the 13% HST comes into effect in Ontario and B.C., they won’t be great places in terms of having to remit sales taxes.