The government of Quebec today announced that, effective for taxation years beginning after April 29, 2026, the Quebec tax rate on corporate income subject to the Small Business Deduction will be reduced from 3.2% to 2.2%. When this is combined with the federal Small Business Deduction corporate tax rate of 9%, it will result in a combined corporate income tax rate on such income of 11.2%, bringing Quebec in line with the Ontario rate on such income that was announced last month in the Ontario budget.
For a corporation or associated group of corporations subject to income tax in Quebec on the maximum $500,000 per annum at the Small Business Deduction rate, this will result in additional savings of $5,000 per annum.
Should you have any questions or wish to discuss further, please contact your Crowe BGK advisor.