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Generally, corporations carrying on business through a permanent establishment in Ontario are subject to both federal and Ontario corporate income taxes. The tax rates apply to taxable income allocated to Ontario.

General rate

The Ontario General corporate income tax rate is currently 11.5%.

July 1, 2011 onwards11.5%
July 1, 2010 to June 30, 201112.0%
Prior to July 1, 201014.0%

Lower rates

Small Business Deduction

The Ontario small business deduction (SBD) reduces the corporate income tax rate on the first $500,000 of active business income of Canadian-controlled private corporations (CCPCs). Effective January 1, 2020, the lower rate of Ontario corporate income tax is reduced from 3.5 per cent to 3.2 per cent.

PeriodLower rate of Ontario corporation income tax
January 1, 2020 onwards3.2%
January 1, 2018 to December 31, 20193.5%
July 1, 2010 to December 31, 20174.5%
Prior to July 1, 20105.5%

Ontario parallels the federal SBD phase‑out where a CCPC's (and associated groups of CCPCs) taxable capital is between $10 million and $50 million for taxation years that begin on or after April 7, 2022 (previously between $10 million and $15 million).  CCPCs (and associated groups of CCPCs) with taxable capital of $50 million or more for taxation years that begin on or after April 7, 2022 are no longer eligible for the lower rate of corporate income tax on the first $500,000 of active business income.

Where a corporation assigns any portion of its federal business limit to another corporation, the corporation's Ontario business limit is also reduced by the same amount by which the federal business limit is reduced.

Ontario does not parallel the federal government measure that phases out the $500,000 small business limit for corporations earning between $50,000 and $150,000 of passive investment income in a taxation year.

More about the Ontario small business deduction

Manufacturing and Processing Tax Credit

Corporations involved in manufacturing and processing, fishing, farming, mining and logging may qualify for a tax credit that reduces the corporate income tax rate to 10 per cent.

More about the Ontario tax credit for manufacturing and processing

Contact the Canada Revenue Agency

The Canada Revenue Agency administers Ontario's corporate income tax, corporate minimum tax, and the special additional tax on life insurers. Contact the agency with your questions at 1-800-959-5525 or 1-800-665-0354 for teletypewriter (TTY).

Canada Revenue Agency - Ontario - Provincial corporation tax