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Section 2: Corporate income taxes 2007
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After adjusting for current and prior year tax losses, taxable income rose 2.1% to $175.9 billion, generating $55.7 billion in corporate taxes payable. The federal portion amounted to $37.9 billion, while the provinces claimed $17.8 billion.
Corporate taxes payable by the finance and insurance industries increased $1.4 billion or 11.5% to $13.8 billion. Taxes payable by the banking and other depository credit intermediation industries were $5.5 billion.
Taxes payable by the non-financial industries were down $1.0 billion or 2.4% to $41.9 billion. Taxes payable by companies engaged in oil and gas extraction and support activities dropped $2.0 billion or almost 40% from 2006.
On the tax relief side, the federal government allows an abatement of taxable income in recognition of the fact that provincial governments impose their own income taxes. The federal tax abatement totalled $17.6 billion in 2007, an increase of 2.7%.
The small business deduction rose to $7.0 billion from $6.0 billion in 2006. The small business deduction threshold was increased from $300,000 to $400,000 in 2007.
The manufacturing and processing profits deduction amounted to $1.3 billion, down from the $1.5 billion claimed in 2006.
Corporations can accumulate investment tax credits during their loss years and claim them when they are profitable. Investment tax credits totalled $1.5 billion in 2007, compared to the $1.8 billion claimed in 2006.
All other federal tax credits combined increased by 7.2% to $7.6 billion. The most significant of these credits is the general tax reduction which applies to qualifying income that does not benefit from preferential corporate tax treatment.
