What Is Corporate Tax?

What corporate income tax means

Corporate income tax is the tax on a corporation’s taxable income. Canada and Ontario both charge it. For income that qualifies for the small business deduction, the combined rate is 11.2 percent on or after 1 July 2026, and it was 12.2 percent before that date. Other taxable income is taxed at 26.5 percent combined. A year that straddles 1 July 2026 uses both Ontario lower rates, counted by the days in each period.

Where to find corporate income tax

The tax is computed on the T2, not on the owner’s T1. The owner’s salary or dividend is a separate personal item. The rate table, with the CRA and Ontario links, is on the corporate rates guide. The business limit and the exceptions are on the CRA table. This glossary entry does not restate the business-limit dollar figure.

Why corporate income tax matters

The Scarborough office prepares the T2 and the statements. Records are kept for at least six years after the return is filed. The fee is quoted from the state of the books.

Records behind the corporation’s return

A corporation reports its taxable income on the T2 each year, and the books support every figure on it. When the CRA writes about a year, bring the letter and that year’s records to the Scarborough office. The firm quotes a six-year retention period for tax records, counted from the end of the last tax year they relate to.

Work with the Scarborough office

Kennedy Tax & Accounting Inc. prepares the return from its only office in Scarborough, near Kennedy Station. You can visit or send the slips. English, Bengali and Tamil are spoken. A CPA has led the firm since 2010. A simple personal return starts at $49.99 + HST. Other work is quoted first.

The personal return is prepared on the personal income tax page. A corporation uses the T2 service. Books are on the bookkeeping page.