Corporate Income Tax

General Corporate Income Tax

The general corporate income tax rate is 15%. This rate is applied to the same taxable income as is calculated for the purposes of the federal corporate income tax system, and applies to taxable income earned in Newfoundland and Labrador that does not qualify for the federal small business deduction.

Small Business Corporate Income Tax

Effective January 1, 2024, small business owners in the province will apply a reduced rate of 2.5% (previously 3%) to determine their corporate income tax payable instead of the general corporate income tax rate of 15%.

The reduced rate of 2.5% applies to the first $500,000 of active business income earned in the province and that qualifies for the federal small business deduction.

In order to qualify for the small business deduction, the taxpayer must be a Canadian controlled private corporation (CCPC) throughout the tax year and maintain a permanent establishment in the province. In addition, the small business must carry on an active business in the province.

Provincial Corporate Income Tax Credits

Businesses paying corporate income tax in Newfoundland and Labrador may offset their income tax payable with one of the province’s tax credits. The following tax credits are offered by the Province to investors and corporations:

All of these credits have different rules concerning eligibility and whether you may carry the credits forward or backward.

You can use the Newfoundland and Labrador Corporation Tax Calculation – Schedule 307 to help you calculate the Newfoundland and Labrador tax before the credits are applied.

Corporate Income Tax Inquiries

The Federal Government administers corporate income tax on behalf of the Province. The Canada Revenue Agency (CRA) can answer your corporate income tax questions. You can contact them at 1-800-959-5525. Additional information can also be obtained from the CRA website.