Corporate Income Tax - Overview
Alberta Small Business Deduction – AT1 Schedule 1 updated - October 24, 2016
Corporations operating in Alberta are required
to file Alberta corporate tax returns in addition to filing with Canada
Revenue Agency (CRA).
Tax and Revenue Administration (TRA), Alberta Treasury Board and Finance, administers the Alberta Corporate Tax Act, that provides for the calculation of:
- Alberta corporate income tax for corporations with a permanent
establishment in Alberta, including Alberta deductions and credits
such as the Alberta small business
deduction, Alberta foreign investment income tax credit, Alberta
political contributions tax credit and scientific research and experimental
development (SR&ED) tax credit (see below); and
- Insurance premiums tax (formerly insurance corporations tax) payable by corporations carrying on the business of insurance in Alberta (see below).
Corporate income tax has been levied by the province since the 1940s.
All incorporated businesses with a permanent establishment (e.g.,
office, mine, farm, oil well, etc.) in Alberta at any time in a taxation
year pay income tax on the portion of their taxable income allocated
The Alberta calculation of taxable income parallels the federal calculation, although taxpayers may claim different discretionary deductions such as capital cost allowances for federal and provincial purposes. The allocation of income among provinces is generally standardized across the country.
Canadian-controlled private corporations not in an associated group may claim a small business deduction on active business income (i.e., non-investment income) up to the small business threshold of $500,000. Canadian-controlled private corporations in an associated group share the maximum small business threshold. For more information about the small business deduction, see information circular CT-17, Alberta Small Business Deduction. Please also see Special Notice Vol. 5 No. 45, Alberta Small Business Tax Rate Reduction, and FAQs.
The insurance premiums tax (formerly referred to as insurance corporations tax) is payable by insurance companies for business transacted in Alberta during the year. For more information, see Special Notice Vol. 5, No. 37, Alberta Corporate Tax Amendment Act, 2012 and Information Circular CT-21, Insurance Premiums Tax.
As part of Budget 2015, on April 1, 2016, the tax rates on premiums receivable on contracts of life, accident and sickness insurance will increase from two to three per cent, while the tax rates on other contracts of insurance will increase from three to four per cent. Please see Special Notice Vol. 5 No. 43 - Insurance Premiums Tax Increase.
- When submitting the tax return, you must also provide a copy of one of the following documents from the fourth quarter return submitted to the Superintendent of Insurance: P&C pages 67.10 and 93.30 OR LIFE pages 95.010 and 95.020.
- The tax return is to be received by TRA on or before the 75th day following the taxation year-end. Late filed returns may be subject to a late filing penalty. The tax due for a taxation year must also be received on or before the 75th day following the taxation year-end. Interest will be charged on late payments.
Alberta's scientific research and experimental development tax credit program provides a refundable tax credit to corporations for SR&ED expenditures incurred in Alberta by the corporations.
See Alberta Corporate Tax Rates and Small Business Deduction (from January 2000 to current).