Canada’s Low Corporate Taxes 

One of the Most Cost-Effective Places to Do Business

Canada’s corporate income tax rate is more than 13 percentage points below comparable rates in the United States—Its strong fiscal position means that Canada can keep corporate taxes at levels below its peers.

In January 2011, Canada reduced its federal corporate income tax rate from 18 percent to 16.5 percent. Canada plans to cut its federal corporate income taxes again, to 15 percent, bringing the combined provincial and federal corporate tax rate to about 26 percent in 2012. This is significantly lower than the comparable 39.2 percent corporate tax rate in the United States. Overall, foreign investors coming to Canada will benefit from one of the lowest overall tax rates on new business investment among OECD countries (see figure below).

Figure: International Comparison of Statutory General Corporate Tax Rates in 2012

Source: Department of Finance Canada, April 2011.

Details of the above chart

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• Think Canada, A Strategic Choice (PDF 0.9 MB)
• Invest in Canada Flagship Report (PDF 7.43 MB)
• Invest in Canada Summary (PDF 2.2 MB)
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For More Information

• KPMG Competitive Alternatives: Executive highlights and International report
• Organisation for Economic Co-operation and Development (OECD)
• IMD World Competitiveness Yearbook
• Statistics Canada
• Canada's Gateways