Corporate Income Tax
Corporate Income Tax Overview
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 royalty tax deduction, 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*);
- Alberta royalty tax credit (ARTC) for corporations that pay eligible Alberta crown royalties (see below**);
- Alberta royalty credit for individuals and trusts (RCIT) that pay eligible Alberta crown royalties (see below**); and
- Insurance premiums tax (formerly insurance corporations tax) payable by corporations carrying on the business of insurance in Alberta (see "Announcements" below).
- Bill 9, the Alberta Corporate Tax Amendment Act, 2012, received Royal Assent on December 10, 2012 and provides for major changes in the Insurance Premiums Tax and the Alberta Scientific Research and Experimental Development (SR&ED) Tax Credit programs. New rules for corporations returning to Alberta have also been legislated along with a number of other changes. For more information, see Special Notice Vol. 5, No. 37, Alberta Corporate Tax Amendment Act, 2012.
- Net File option for Alberta Corporate Income Tax:
effective July 8, 2011, Tax and Revenue Administration (TRA) will
offer Alberta corporate income tax filers the option of filing returns
in electronic format. See Corporate
Income Tax - Net File and Frequently
Asked Questions. The following Corporate Income Tax document
has been updated to reflect this new filing option:
Certified for AT1 Net File Return Format for 2008 and Subsequent
- Software Certified for AT1 Net File Return Format for 2008 and Subsequent Taxation Years
- Refund Interest Rate Change Questions and Answers updated November 25, 2010, and Special Notices added:
2008, The Right Plan for Today and Tomorrow, tabled
on April 22, 2008, increased the small business threshold
from $430,000 to $460,000, effective April 1, 2008. The threshold
increased to $500,000 on April 1, 2009.
- **As announced by the Alberta government on September 21, 2006, (Energy Minister confirms end of Alberta Royalty Tax Credit Program) Alberta discontinued its ARTC and RCIT programs for corporations, individuals and trusts effective January 1, 2007. See Special Notice Vol. 5 No. 21, Discontinuance of Alberta Royalty Tax Credit (ARTC) and Royalty Credit for Individuals and Trusts (RCIT) Programs.
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.
Small Business DeductionCanadian-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.
Alberta Royalty Tax Deduction
Crown royalties are paid by companies to the provincial government for the right to extract natural resources owned by Albertans.
Alberta Royalty Tax Credit (ARTC)
The Alberta Royalty Tax Credit (ARTC) was a royalty program administered through the income tax system. It returned a percentage of a specified amount of Alberta crown royalties paid in a year on conventional oil and gas production. Both the percentage, or credit rate, and the specified amount varied over time.
Most recently, the credit rate reflected fluctuations in quarterly oil and gas prices. Maximum benefits ranged from $500,000, calculated at 25 per cent of eligible royalties up to $2 million when the reference price exceeded $210, to $1.5 million or 75 per cent of eligible royalties when the price was $100 or less.
This program was discontinued effective January 1, 2007, as noted above.
Insurance Premiums Tax
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.
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.