Provincial Corporate Income Taxes
Prince Edward Island corporate income taxes are administered and collected by the federal government through Canada Revenue Agency on behalf of the province. PEI’s corporate income tax rates and small business threshold are set by the Government of PEI and applied to federally defined PEI taxable income.
Corporate Income Tax Rates and Small Business Income Threshold
Effective July 1, 2025, changes to the general business tax rate and the small business tax threshold are expected to save Island businesses an estimated $9.3 million in the 2025-2026 fiscal year.
Changes include decreasing the general tax rate for businesses from 16 per cent to 15 per cent and increasing the small business income threshold by $100,000 to $600,000. This means every business operating in the province can claim more of their income under the lower rate of business tax and positions PEI as having the second highest small business income threshold in Canada.
| Before July 1, 2025 | Effective July 1, 2025 | |
| General Rate | 16.0% | 15.0% |
| Small Business Rate | 1.0% | 1.0% |
| Small Business Income Threshold | $500,000 | $600,000 |
To access the necessary forms to file or if you have any questions about your corporate income taxes, please visit the CRA website.
Business Navigator is a free service that helps guide business owners and entrepreneurs through provincial regulations associated with starting, owning, operating and growing a business in PEI; more information is available on the Business Navigator website.
Those interested in learning more about the business opportunities and support available in PEI, including information on our target sector advantages, our workforce, business ecosystem, and more are encouraged to visit Innovation PEI.