Corporate Income Taxes

Manitoba Corporate Income Tax (2008)

The 13.0%* basic provincial corporation income tax rate in Manitoba is applied to corporation taxable income allocated to the Province. Corporations which are eligible for the federal small business tax rate reduction pay 1.0% on the first $400,000 of corporation taxable income allocated to Manitoba, apportioned in accordance with federal provisions. Manitoba corporation income taxes are administered and collected by Canada Revenue Agency on behalf of the Province.

*As of July 1, 2009, the rate will be reduced from 13% to 12%. Subject to balanced budget requirements, the rate will be further reduced to 11% in subsequent years.

For more information on the corporation income taxation in Manitoba, contact Federal-Provincial Relations and Research Division, Manitoba Department of Finance or call
(204) 945-3757.

Federal Corporate Income Taxes

The basic federal corporate income tax rate in Canada is 38% and is assessed on national corporate taxable income. Corporations which are liable for provincial corporate income tax receive an abatement equal to 10%, reducing the basic federal rate to 28%. Corporations also paid a surtax equal to 4% of the basic federal corporate income tax until January 1, 2008 (less the abatement).

The 2000 Federal Budget announced a gradual reduction in the general corporate income tax rate. Only business income not otherwise receiving preferential corporate income tax treatment qualifies for the lower rate.

The 2008 general corporate income tax rate is 19.5%. For 2009 the rate will be further reduced to 19%.

The small business limit, as of January 1, 2007 is $400,000. The small business rate, commencing January 1, 2008 is 11%.

The 8.5% manufacturing and processing profits deduction reduces federal corporate income taxes otherwise payable. Manufacturing and processing income qualify for the deduction if at least 10% of the corporation's revenue from businesses carried on in Canada is derived from the sale or lease of goods manufactured or processed in Canada by it. Income eligible for the 11% small business tax rate reduction does not qualify for the manufacturing and processing profits deduction.

For more information on the federal corporate income taxation in Canada, contact the Canada Revenue Agency, 325 Broadway, Winnipeg, 1-800-959-5525 or visit the Canada Revenue Agency Web site.