Administered by Government of Canada · Last verified: July 2026
Every province has its own small business tax rate that applies on top of the federal Small Business Deduction. Combined rates can be as low as 9% on the first $500K of active income.
You claim this on your tax return, so the money comes back as a lower tax bill or a refund after you file. If you missed it in a past year, you can often still recover it by adjusting a prior return.
Take the 3-minute quiz to find out, and see every other Canadian program you qualify for at the same time.
Check my eligibilityProvincial Small Business Tax Rate Reduction is generally open to incorporated businesses, in any province or territory. Confirm the full criteria on the official program page before applying.
The estimated value is Up to 15% combined effective rate savings. The actual amount depends on your eligible costs, the program's budget, and approval.
Claimed on a return, so a missed year can usually be recovered by amending. How far back depends on whether you file personally or as a corporation; confirm the eligible years with your accountant.
1. Maintain CCPC status 2. Allocate income to the right province 3. Apply provincial small business rate on T2
Annual: file with T2 and provincial return.