Taxation: Doing Business In Canada 2026

This chapter is part of our Doing Business in Canada guide, designed to help global investors navigate the legal, regulatory and strategic considerations that affect investment decisions, execution, and long-term success in Canada.

Income Tax

Income taxes are imposed at the federal level, as well as by the various provinces and territories. Federal income tax is levied on the worldwide income of every Canadian resident and, subject to the provisions of any applicable income tax convention, on the Canadian-source income of every non-resident who is employed in Canada, who carries on business in Canada, or who realizes a gain on the disposition of certain types of Canadian property (referred to as “taxable Canadian property”). Generally, a province or territory will also impose an income tax on persons resident, or carrying on business, in the provincial or territorial jurisdiction. Certain provinces and territories also tax non-residents on employment income earned in the province or