Canadian Corporate Tax, GST/PST Filing, and Transfer Pricing Advisory

Canada's federal corporate income tax rate is 15% for general corporations (net of the 10% federal abatement where provincial tax applies). Ontario levies 11.5% provincial CIT, giving a combined Ontario rate of 26.5%. Canadian-Controlled Private Corporations (CCPCs) benefit from the Small Business Deduction: the combined federal-Ontario rate on active business income up to CAD 500,000 is 12.2%. The CRA is the federal tax authority responsible for assessment and collection.

A business must register for GST/HST once its worldwide taxable supplies exceed CAD 30,000 in a single calendar quarter or over any four consecutive quarters. Small suppliers below this threshold may register voluntarily. GST is 5% (federal); in harmonized provinces the combined rate is 13% in Ontario, 14% in Prince Edward Island, and 15% in Nova Scotia, New Brunswick, and Newfoundland. Registration is completed online with CRA and typically confirmed within 10 business days.

HST (Harmonized Sales Tax) is a combined federal-provincial sales tax collected by the CRA on behalf of participating provinces. Ontario's HST is 13% (5% federal + 8% provincial), replacing the separate GST and Ontario Retail Sales Tax. Provinces that have not harmonized — notably Quebec (which administers its own QST at 9.975%) and British Columbia (PST 7% separately) — still require businesses to manage two separate sales tax registrations and filings.

A Canadian chartered professional accountant (CPA) is not legally mandated, but is strongly advisable. The CRA requires all corporations to file a T2 Corporate Income Tax Return annually within six months of fiscal year-end, and to pay any balance owing within two months (three months for CCPCs with active income). CPA-prepared financials are required for SR&ED (R&D) claims, bank financing, and regulated industries. INNOVA CG partners with licensed Canadian CPAs to provide ongoing bookkeeping and annual filing services.

The Canada Revenue Agency (CRA) is the federal body administering tax laws and benefit programs. Key obligations for a Canadian corporation include: filing the T2 return within 6 months of year-end; remitting payroll source deductions (CPP, EI, income tax) by the 15th of the following month; HST/GST returns monthly, quarterly, or annually depending on volume; and maintaining corporate records for a minimum of six years. Director liability applies for unremitted payroll deductions.