Tax Memo: Ontario Tax Harmonization
What it Means for Corporations
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. As a result, the compliance burden of corporations that are taxable in Ontario will decrease significantly. Each will file a single combined tax return, and may benefit from a streamlined tax system that includes a harmonized corporate income tax base.
Federal tax attributes will replace Ontario tax attributes and differences between the federal and Ontario definitions of taxable income will disappear. Under transitional provisions, over a five-year period, a corporation will have a tax liability or receive tax relief that accounts for the difference between federal and Ontario tax attribute balances.
