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Businesses > Income tax > Corporations > Income tax return > Compensation tax

Compensation tax

The following table shows the compensation tax payable by various types of financial institutions. The form Calcul de la taxe compensatoire des institutions financières (CO-1159.2) is used to calculate the amount of compensation tax payable. The form must be enclosed with the corporation return of the financial institutions concerned.

Bank, loan corporation, trust corporation, corporation trading in securitiesThe total of the following amounts:
  • 0.25% of the paid-up capital determined for the purposes of calculating tax on capital, without taking into account the deduction for a corporation entitled to the temporary deduction (and, in the case of a bank, the $500 million deduction), multiplied by a fraction whose numerator is the number of days the corporation was a financial institution during the taxation year and whose denominator is the total number of days in the taxation year
  • 2% of the salaries and wages paid in the year, or during the portion or portions of the year in which the corporation was a financial institution
Insurance corporation that is subject to the tax on capital for insurance corporations and that is a financial institution

The total of the following amounts:

  • 0.35% of the result obtained by multiplying any payable premium on which  tax is payable during the year by a fraction whose numerator is the number of days the corporation was a financial institution during the taxation year and whose denominator is the total number of days in the taxation year
  • 0.35% of the result obtained by multiplying any taxable premium on which tax is payable during the year by a fraction whose numerator is the number of days the corporation was a financial institution during the taxation year and whose denominator is the total number of days in the taxation year
Savings and credit union2.5% of the salaries and wages paid in the year, or during the portion or portions of the year in which the corporation was a financial institution
Professional order0.35% of the premiums, administration fees, contributions under the group plan or the professional liability insurance fund, and all other expenses
Bank, loan corporation, trust corporation, corporation trading in securities or savings and credit union that is ALSO an insurance corporation

The total of the following amounts:

  • the amount determined, according to the above instructions, with respect to the corporation
  • 0.35% of the result obtained by multiplying any paid taxable premium on which tax is payable during the year by a fraction whose numerator is the number of days the corporation was a financial institution during the taxation year and whose denominator is the total number of days in the taxation year
Any other corporation1% of the salaries and wages paid in the year, or during the portion or portions of the year in which the corporation was a financial institution

For more information, consult the Guide to Filing the Corporation Income Tax Return (CO-17.G-V).

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