1. Corporate Income Tax

Resident enterprises: Companies incorporated in Canada or with central management and control in Canada are taxed on worldwide income.

Federal base rate 38%, reduced to effective 15% for general corporations.

Canadian-Controlled Private Corporations (CCPCs) pay federal tax as low as 9% on the first CAD 500,000 of active income.

Provincial rates: General corporate rates range from 8% to 16% (AB 8%, BC 12%, ON 11.5%). CCPC small business provincial rates can be as low as 0%-3.2%, with combined federal-provincial rates from about 9% to 12.2%.

Non-resident enterprises: Taxable on income from business activities in Canada; tax treaties may provide preferential rates.

2. GST/HST/PST

(1) GST

GST (Goods and Services Tax) is a federal value-added tax at a uniform rate of 5%. Most goods and services consumed in Canada are subject to GST, paid by consumers and remitted by businesses.

Who must register for GST?

Non-resident businesses must register if they:

Sell taxable goods or services in Canada; and

Are not a "small supplier."

Small supplier threshold: global taxable sales do not exceed CAD 30,000 in the last four consecutive quarters. Small suppliers may voluntarily register (allowing input tax credits but with filing obligations).

GST registration security deposit (key cost for non-residents):

Non-resident applicants must provide a security deposit ranging from CAD 5,000 to CAD 1 million, based on estimated net tax for the next (or past) 12-month period.

GST filing frequency:

Annual: sales ≤ CAD 1.5 million.

Quarterly: sales between CAD 1.5 million and CAD 6 million.

Monthly: sales > CAD 6 million.

Deadlines: Monthly/quarterly filings due by the last day of the month following the reporting period. Annual filings due within 3 months after the period end.

(2) HST (Harmonized Sales Tax)

HST combines federal GST with provincial PST into a single tax administered by the CRA. Provinces with HST use a combined rate (e.g., Ontario 13% = 5% federal + 8% provincial). Businesses file once, simplifying compliance.

HST provinces: Ontario, New Brunswick, Newfoundland and Labrador, Prince Edward Island, Nova Scotia.

(3) PST (Provincial Sales Tax)

PST is a separate retail sales tax in some provinces, applying to final consumption of goods/services within the province, not exports or cross-border sales.

PST is administered by provincial tax authorities, requiring separate filing. PST provinces: BC (7%), SK (6%), Manitoba (7%), Quebec (9.975% QST). In these provinces, businesses must file 5% GST federally and PST provincially, increasing compliance costs.

Note: Provincial rates may change; refer to CRA for latest updates.

3. Tax Filing Deadlines

Companies must set their fiscal year in the first year (max 53 weeks). Corporate income tax and GST returns are due by March 31 of the year following registration and annually thereafter.