Corporate Tax Rates and Legislation: Q3 2025 Accounting Status

Issue 3 – Q3 2025 Accounting Status

• Legislative changes—July 1, 2025 to September 30, 2025
• Accounting updates—July 1, 2025 to September 30, 2025
• Federal and provincial/territorial bills—tabled or received royal assent in 2025
• Corporate income tax rates—accounting status (January 1, 2022 to September 30, 2025)

Legislative changes — July 1 to September 30, 2025

Legislative developments from July 1 to September 30, 2025, that affect income taxes, are outlined below.

Federal draft legislative proposals (2024 federal Fall Economic Statement, 2024 federal budget and other proposals)

On August 15, 2025, the Department of Finance released draft legislative proposals to implement several 2024 federal Fall Economic Statement (FES), 2024 federal budget and other measures, and technical amendments. It also announced public consultations on these proposals. Key 2024 FES, 2024 federal budget and other tax measures contained in the draft legislative proposals include:

• significantly enhancing the scientific research and experimental development (SR&ED) tax incentive program
• providing certain elective exemptions from the excessive interest and financing expenses limitation (EIFEL) regime and making technical amendments to the EIFEL regime
• enhancing Canada Revenue Agency (CRA) audit powers to more easily obtain information, including a new penalty for non-compliance
• implementing the Organisation for Economic Co-operation and Development’s (OECD’s) Crypto-Asset Reporting Framework in Canada and revising the Common Reporting Standard

For more information, see our Tax Insights:

• “SR&ED updates: Enhanced credits, expanded eligibility and emerging opportunities”
• “Bill C-59: Excessive interest and financing expenses (EIFEL) regime” (September 16, 2025 update)
• “Finance releases draft legislative proposals to enhance CRA audit powers”
• “Finance releases draft legislative proposals to implement the Crypto-Asset Reporting Framework”
• “Finance releases draft legislative proposals to update the Common Reporting Standard”

Status: As at September 30, 2025, the draft legislative proposals have not been tabled as a bill in the House of Commons and, therefore, are not considered substantively enacted for Canadian GAAP or enacted for US GAAP.

Federal draft legislative proposals (global minimum tax)

On August 15, 2025, the Department of Finance released draft legislative proposals to amend the Income Tax Act (ITA) and the Global Minimum Tax Act (GMTA) in respect of the global minimum tax (GMT) regime. Key proposals include:

• integrating the ITA’s foreign affiliate regime and foreign tax credit rules with the GMTA
• introducing a de-consolidation rule in the GMTA that applies to a multinational enterprise group that includes a “private investment entity” (i.e. a Canadian entity that is not publicly listed and has a controlling interest in a Canadian public company)

For more information, see our Tax Insights “Finance releases draft legislation to amend the Pillar Two rules and integrate the foreign affiliate regime with Pillar Two.”

Status:* As at September 30, 2025, the draft legislative proposals have not been tabled as a bill in the House of Commons and, therefore, are not considered substantively enacted for Canadian GAAP or enacted for US GAAP.

^{*As at September 30, 2025, legislation to enact the G7 “shared understanding” on GMT that will allow a “side-by-side” system to exempt US parented corporate groups from certain Canadian GMT rules (as discussed in our Q2 2025 Accounting Status issue) has not been tabled as a bill in the House of Commons and, therefore, it is not considered substantively enacted for Canadian GAAP or enacted for US GAAP.}

Voluntary Disclosures Program

On September 10, 2025, the CRA issued new guidance on how it will administer its Voluntary Disclosures Program (VDP) for submissions made after September 30, 2025. The VDP provides an option for taxpayers to correct unreported tax compliance matters with interest and penalty relief in certain circumstances. Changes to the VDP improve the program by enhancing both VDP eligibility and the benefit relief that can be obtained from submitting a VDP application. For more information, see our Tax Insights:

• “The Canada Revenue Agency revises its Voluntary Disclosures Program effective October 1, 2025”
• “Changes to the Canada Revenue Agency’s Voluntary Disclosures Program for GST/HST and other taxes”

Status: The interest and penalty relief offered through the VDP is administratively granted by the CRA and does not require legislation to enact it.

Trade tariffs and government support

United States President Donald Trump continues to issue executive orders that impose tariffs (or alter tariff rates) on certain goods imported from Canada. The Canadian government has responded with several retaliatory measures, which are modified as the situation evolves, and by providing government support to certain Canadian business sectors. For more information on the current tariff situation and to help your business assess and manage these tariffs, visit our Tariffs and Trade Policy Resource Centre.

Federal, provincial and territorial governments have announced measures intended to support Canadian businesses affected by the tariffs. For tariff-related support programs, see Tariff relief: Unlocking government support.

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Accounting updates — July 1 to September 30, 2025

There were no significant updates relating to the accounting for income tax.

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Federal and provincial/territorial bills 

Table 1 lists key bills that include corporate income tax rate changes or other income tax changes (e.g. for research and development) that were:

• tabled or received royal assent during 2025, or
• tabled before 2025, but did not receive royal assent before 2025

Table 1: Federal and provincial/territorial bills
There were no changes in status from July 1 to September 30, 2025.

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Corporate income tax rates—accounting status (January 1, 2022 to September 30, 2025) 

The following information excludes Canadian-controlled private corporation small business rates and thresholds.

Table 2: Corporate income tax rates—accounting status
There were no changes in status from July 1 to September 30, 2025.

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