Ontario Corporate Tax Harmonization for Insurance Companies

Ontario's corporate income tax and minimum tax will be administered by the Canada Revenue Agency (CRA), starting with taxation years ending after December 31, 2008. This Tax Memo addresses Ontario corporate tax harmonization issues that affect insurance companies.

The transition will significantly decrease the compliance burden of Ontario-based taxable corporations. They will file a single-combined tax return, make combined tax payments to the CRA and benefit from a streamlined tax system that includes a harmonized corporate income tax base.

Federal tax attributes will replace the Ontario counterparts and differences between the federal and provincial definitions of taxable income will disappear. Under these provisions, a corporation will have a transitional debit (tax liability) or transitional credit (tax relief) to account for the difference between federal and Ontario tax attribute balances. These adjustments will affect the companies' taxable income over a five-year period.

Tax Memo: Ontario Corporate Tax Harmonization for Insurance Companies (78 KB) Download the full PDF.