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CCPC (Canadian-Controlled Private Corporation)

A Canadian-Controlled Private Corporation is a private corporation controlled by Canadian residents. CCPCs qualify for the 9% Small Business Deduction rate on active business income, the 35% refundable SR&ED investment tax credit, and the Lifetime Capital Gains Exemption on a qualifying share sale.

Small Business Deduction (SBD)

The Small Business Deduction reduces the federal corporate tax rate from 15% to 9% for Canadian-Controlled Private Corporations on the first CAD 500,000 of active business income per year. The deduction is subject to reduction for associated corporations, passive investment income, and taxable capital above CAD 10 million.

GST / HST

GST (Goods and Services Tax) is a 5% federal tax on most goods and services supplied in Canada. In participating provinces, GST is combined with the provincial sales tax into the Harmonized Sales Tax (HST): Ontario 13%, New Brunswick, Nova Scotia, Newfoundland and Labrador, and PEI 15%. Businesses must register once taxable sales exceed CAD 30,000.

T2 Corporate Income Tax Return

The T2 is the annual corporate income tax return filed with the Canada Revenue Agency by all Canadian resident corporations and certain non-resident corporations with a taxable presence in Canada. The return is due within 6 months of the corporation's fiscal year-end. The balance of corporate tax owing is due 2 months after year-end (3 months for eligible CCPCs).

CPP (Canada Pension Plan)

The Canada Pension Plan is Canada's mandatory public pension scheme for employed and self-employed workers. In 2025, both employer and employee each contribute 5.95% on earnings between CAD 3,500 and CAD 71,300 (the Year's Maximum Pensionable Earnings). A second tier (CPP2) applies 4% on earnings between CAD 71,301 and CAD 81,200. Self-employed individuals pay both sides.

EI (Employment Insurance)

Employment Insurance is Canada's federal programme providing temporary income support to workers who lose their jobs or cannot work due to illness, pregnancy, or caregiving. Employees pay 1.64% on insurable earnings up to CAD 65,700 (2025), and employers pay 1.4 times the employee rate (2.296%). Quebec employees pay a reduced rate due to the Quebec Parental Insurance Plan.

Partially deductible. Employees need a signed T2200 from their employer and can claim only the detailed method (actual costs proportioned to workspace). Self-employed individuals use Form T2125 and may claim rent or mortgage interest, utilities, and maintenance for the portion of the home used exclusively and regularly for business.

Fully deductible. Salaries, wages, bonuses, and reasonable allowances paid to employees for services rendered are deductible business expenses. The employer's share of CPP (5.95%) and EI (2.296%) are also deductible. Salaries paid to family members are deductible only if they are reasonable for the services performed.

Yes, professional fees paid to accountants, lawyers, consultants, and advisors for advice related to earning business income are fully deductible. Legal fees for capital transactions (incorporation, share purchases, property acquisitions) are not deductible as expenses but are added to the adjusted cost base (ACB) of the asset.

Partially deductible based on business-use percentage. You can claim actual costs (fuel, insurance, maintenance, CCA) multiplied by the business proportion, or use CRA's per-kilometre rates (70 cents/km for the first 5,000 km of business travel, 64 cents/km after, for 2025). Passenger vehicles over CAD 36,000 have a CCA cost cap.

50% deductible for meals and entertainment incurred for business purposes. Receipts and business purpose must be documented. Exceptions allow 100% deduction for certain employee events (up to 6 per year), meals at remote work sites with shift restrictions, and meals included in a conference fee.

Yes, deductible via Capital Cost Allowance (CCA). Computers and office equipment fall into Class 8 at a 20% declining balance rate. The half-year rule limits the first-year deduction to 50% of normal CCA. Immediate expensing for CCPCs (up to CAD 1.5M) was available through to end of 2024 - check current CRA guidance for the latest status.