Ontario – Provincial corporation tax

What's new for corporations 

Basic rate

The Ontario basic income tax rate is 11.5%.

Lower rate

The Ontario small business deduction reduces Ontario basic income tax, resulting in a lower tax rate of 3.5%. Before January 1, 2018, this rate was 4.5%.

If the rate changes during the tax year, you have to base your calculation on the number of days in the year that each rate is in effect.

Reporting the tax

The T2 return includes the following Ontario corporation taxes:

• Basic income tax
• Corporate minimum tax
• Special additional tax re life insurance
• Additional tax re Crown royalties

You can use Schedule 500, Ontario Corporation Tax Calculation, to calculate your Ontario basic income tax. Schedule 500 is a worksheet and does not have to be filed with your return.

On line 270 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of basic income tax calculated.

Transitional measures

The Ontario transitional tax debits and credits provide a transition from the Corporations Tax Act (Ontario) for corporations with different income tax attributes for federal and Ontario purposes.

• Transitional tax debits/credits

Claiming the credits

Ontario offers different tax credits. Details of each credit can be found in the following pages and their associated schedules:

• Apprenticeship training tax credit
• Business-research institute tax credit
• Capital gains refund
• Community food program donation tax credit for farmers
• Co-operative education tax credit
• Corporate minimum tax credit
• Credit union tax reduction
• Foreign tax credit
• Innovation tax credit
• Political contributions tax credit
• Qualifying environmental trust tax credit
• Refundable media tax credits
  • Book publishing tax credit
  • Computer animation and special effects tax credit
  • Interactive digital media tax credit
  • Film and television tax credit
  • Production services tax credit
  • Sound recording tax credit
• Research and development tax credit
• Resource tax credit
• Tax credit for manufacturing and processing

Other requirements

• Ontario specialty types
• Ministry of Government and Consumer Services (MGCS) annual return

Forms and publications

• Schedule 5, Tax Calculation Supplementary – Corporations
• Schedule 500, Ontario Corporation Tax Calculation

Government partners

• Ontario Ministry of Finance
• Ontario e-Laws