Besides grants, smaller financial institutions can also tap on IRAS’ tax exemption schemes and other tax reliefs that can help reduce their tax bills in a particular Year of Assessment (YA). 

Tax Schemes to Lower Tax Payable

Start-up companies are given tax exemption for the first three consecutive YAs which includes:

• 75% exemption for the first $100,000 of normal chargeable income
• A further 50% exemption on the next $100,000 of normal chargeable income

All companies Companies who claimed tax exemption for new start-up companies are not eligible for partial tax exemption. are given partial tax exemption for subsequent YAs which includes:

• 75% exemption for first $10,000 of normal chargeable income
• A further 50% exemption on the next $190,000 of normal chargeable income

For more information on the tax schemes and the qualifying conditions, please refer to IRAS’ website . 

All companies are also given corporate income tax rebate which includes 25% corporate income tax rebate on final tax payable for YA 2020 (capped at $15,000).

For more information on the corporate income tax rebate, please refer to IRAS’ website . 

Carry Forward Losses to Reduce Tax Payable

Unutilised trade losses can be carried forward indefinitely for set-off against future years’ taxable income which reduces tax payable.

For more information on the qualifying conditions, please refer to IRAS’ website .

Financial Sector Tax Incentive Schemes

Additional tax incentives are available for financial institutions with plans to establish or expand their operations in Canada .

For more information on the qualifying conditions, please refer to the scheme webpage.