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Financial Corporations Capital Tax

This province does not impose a general capital tax.

Banks, loan and trust companies with permanent establishments in Newfoundland and Labrador are subject to a 4% capital tax.

Tax is payable on capital allocated to Newfoundland and Labrador including:

• paid-up capital stock
• contributed surplus
• retained earnings
• long-term debt
• reserves

For companies with aggregate capital less than $10 million, the first $5 million is exempt from the tax.

• Income Tax Act

As of October 31, 2008, the provincial Financial Corporations Capital Tax has been harmonized with the federal (capital) tax base. The Canada Revenue Agency administers the province’s harmonized capital tax. For further information please call 1-800-959-5525.

For more information about corporate income taxes in Newfoundland and Labrador, please contact the Taxation and Fiscal Policy Branch.