Ontario Small Business Corporate Tax Rate

On December 10, 2019, Ontario’s Bill 138 received Royal Assent.

The small business corporate income tax rate has been reduced to 3.2% (from 3.5%), as announced in Ontario’s 2019 Fall Economic Update.

This brings the combined Federal and Ontario Small Business Corporate Tax Rate to 12.2% (from 12.5%), effective January 1, 2020.

This rate applies to the first $500,000 of qualifying active business income of a Canadian-controlled private corporation.

The bill also includes other measures that increase the non-eligible dividend tax rate for individuals.

Forms & Publications

Guide T4012, T2 Corporation – Income Tax Guide
Guide T7B-CORP, Corporation Instalment Guide

Bill 138 Royal Assent (PDF)

Government of Canada – Corporation tax rates