Are you a business owner or a manager? Have you ever thought of hiring a tax consultant in Calgary? If not, you should! Why?

It is because Canadian corporate tax law is complex and vast. Not every ship can go through it without an experienced caption. How much do you know about it? When it comes to running a business, it is important to understand the various taxes that come with it.

In Canada, there are three main types of corporate taxes that every business owner should be aware of. These taxes can have a significant impact on your business’s financial health, so it’s important to understand them to make informed decisions. Today, we will be discussing the three types of corporate taxes in Canada, their benefits, and why you should hire a professional tax consultant.

Federal Corporate Tax

The federal corporate tax is a tax on the income of a corporation that operates within Canada. The tax rate for this type of tax is currently 15% for small businesses & 38% for large businesses. The following are the key features of federal corporate tax –

  • It applies to all corporations operating within Canada, regardless of their size and industry
  • The tax rate varies depending on the size of the corporation
  • It is paid annually and calculated based on the corporation’s income for the previous year

Benefits

  • Provides funding for government programs and services
  • Encourages corporations to invest in Canada by offering lower tax rates for small businesses
  • Supports economic growth by providing corporations with incentives to invest in research and development

Provincial Corporate Tax

The provincial corporate tax is a tax on the income of a corporation that operates within a specific province or territory. The tax rate for this type of tax varies depending on the province or territory in which the corporation operates. The following are the key features of PCT –

  • It applies to corporations operating within a specific province or territory
  • The tax rate varies depending on the province or territory
  • It is paid annually and calculated based on the corporation’s income for the previous year

Benefits

  • Provides funding for provincial programs and services
  • Encourages corporations to invest in a specific province /territory by offering lower tax rates
  • Supports economic growth by providing corporations with incentives to invest in the local economy

Payroll Tax

The payroll tax is a tax on the wages paid to employees by a corporation. This tax is split between the employer and the employee, with the employer being responsible for deducting and remitting the employee’s portion. The following are the key features of the payroll tax –

  • It applies to all corporations with employees
  • The tax rate varies depending on the province or territory in which the corporation operates
  • It is paid monthly or quarterly, depending on the corporation’s remitting frequency

Benefits

  • Provides funding for government programs and services
  • Encourages corporations to create jobs by offering lower tax rates for small businesses
  • Supports social programs such as employment insurance, which provides financial support for employees who lose their job

Consequences of Failing to Submit Corporate Taxes on Time

Failing to submit corporate taxes on time can result in significant consequences for a Canadian corporation. It is where an expert tax consultant plays a vital role. The professional can save your company from late filing penalties, interest charges on outstanding amounts, legal action by the Canada Revenue Agency, loss of reputation with stakeholders, etc.,

Get Our Expertise

At AM Accountants Professional Corporation, we understand the importance of corporate taxes and can help you navigate the complex tax system in Canada. We offer a range of tax services, including tax planning, compliance, and representation.  Talk to our tax consultant in Calgary.

Contact us today to learn more about how we can help you with all your corporate tax needs.