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A corporation doesn’t pay a special corporate gains tax. When it sells shares or property for more than it paid, the profit is a capital gain, and the corporation reports only a share of it as taxable income. On the CRA’s Schedule 6 that share is one-half. So a $100,000 gain adds $50,000 to taxable income, and the other $50,000 isn’t taxed as income.
How is a corporate capital gain calculated?
Take what you sold the asset for, subtract what it cost you and the expenses of selling it. What’s left is the gain. Schedule 6 of the T2 return multiplies a positive net gain by one-half to get the taxable capital gain. The untaxed half is tracked for the company’s capital dividend account, which can later be paid out to shareholders in a particular way. That step needs an election and some care, so it’s a question for an accountant.
Here’s the catch on the rate. Our data lists the 50% inclusion for 2026 as inferred, not printed in the CRA page we read, though the planned increase to two-thirds was cancelled. Check the current T2 guide before you lean on it.
What does a real sale look like?
Picture a small Ontario holding company that bought shares for $60,000 and sold them for $100,000, with no selling costs. The gain is $100,000 minus $60,000, which is $40,000. At the one-half inclusion, $20,000 is the taxable capital gain and the other $20,000 is the untaxed half. Add $20,000 to the company’s other income for the year and that’s what gets taxed.
Now compare a company that sold the same shares for $60,000. No gain, nothing to report on Schedule 6. The arithmetic is simple. The part that needs thought is what rate applies to that $20,000, and that comes next.
What rates apply to the taxable half?
That depends on what kind of corporation you run and what the gain is. The rates below are for active business income, which is what our calculator handles. They line up with the CRA’s corporation tax rates page, which gives the 15% general federal rate, the 9% small business rate and the $500,000 limit.
| Item | 2026 figure |
|---|---|
| Federal general rate | 15% |
| Federal small business rate, first $500,000 | 9% |
| Ontario combined, general | 26.5% |
| Ontario combined, small business | 11.7% for a calendar 2026 year |
| British Columbia combined, general and small | 27% and 11% |
The Ontario small business figure is a blend, because the province cut its lower rate on 1 July 2026. It’s derived from the published change, not itself a published rate.
Why a gain on investments isn’t like business profit
Investment income earned inside a private corporation, taxable gains included, is generally taxed differently from active business profit, and part of that tax can be refunded when the company pays dividends. We didn’t confirm the current rates or the refund mechanics from an official page, so we don’t quote a percentage. Nor does the corporate tax calculator, which has boxes for passive income and shared limits, though it leaves out taxable capital and credits.
Why does this matter? A company that sells a portfolio and expects the small business rate on the gain will probably be surprised. Ask an accountant for the real figure before you sell.
What does the calculator show on business income?
Use it for the active side. An Ontario company with $300,000 of active business income pays $35,088.00 for a calendar 2026 year, an average of 11.7%, and keeps $264,912.00. With $800,000, the bill is $137,980.00, or 17.2%, because income above $500,000 is taxed at the higher general rate. That’s one way the limit shapes decisions.
The result excludes tax on paying money out to owners. If you take dividends afterwards, look at the dividend tax calculator. And if you’re weighing a personal sale instead, try the capital gains tax calculator. The rules differ, so don’t assume the answers match.
Mistakes that cost money
- Selling an asset without knowing its original cost, which leaves you guessing at the gain.
- Assuming the small business rate covers investment gains.
- Booking a sale without checking whether it counts as a capital gain at all.
- Ignoring associated companies, which share one $500,000 limit.
Keep the purchase paperwork for property and shares with no end date. The CRA’s record pages say those files aren’t on the six-year clock. If you’re ever unsure which bucket a sale falls into, a ballpark from a calculator is useful for planning, but the filing itself is a job for the company’s accountant.
Where this information comes from
Federal rates and the $500,000 limit come from the CRA‘s corporation tax rates page. Provincial rates come from CRA provincial pages and published budget notices, checked on 29 September 2026, and a few are marked for review. The one-half rule comes from CRA Schedule 6. We aren’t a government service and we don’t speak for one.
Frequently asked questions
Is there a separate corporate gains tax in Canada?
No. A corporation reports a taxable capital gain in its income. Schedule 6 of the T2 applies one-half to a net gain.
How much of a $100,000 gain is taxable?
$50,000, using the one-half share on Schedule 6. We couldn't confirm the 2026 inclusion rate from a current CRA page, so check the T2 guide.
Does the small business rate apply to a gain?
Not safely. Investment income in a private corporation is generally taxed differently. We haven't confirmed the rates, so ask an accountant.
What is the corporate tax on $300,000 in Ontario?
$35,088.00 for a calendar 2026 year, or 11.7%, on active business income, according to our calculator.
Where do I report a gain?
On Schedule 6 of the T2 return, which feeds the taxable capital gain into the return.
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