Capital tax

The federal capital tax—often referred to as the large corporations tax—was eliminated several years ago.

A separate federal capital tax still applies for financial institutions and insurance corporations. Taxable capital in excess of $1 billion is subject to the tax at a single tax rate of 1.25%. However, a financial institution can reduce its capital tax payable by the amount of income tax it pays.

None of the provinces assess a general capital tax, although all jurisdictions (except Alberta and the three Territories) continue to assess a capital tax on some or all types of financial institutions and, in some cases, resource and Crown corporations.