Open
Small Business Deduction (SBD)
Small business tax credit
Last Update: March 4, 2026
Funding available
No Condition
Timeline
- Open continuously
Location
Canada
Overview
The Small Business Deduction (SBD) reduces corporate income tax for Canadian-controlled private corporations by providing a tax benefit on up to $500,000 of active business income annually. The program aims to support the growth of small businesses by encouraging active business operations within Canada.
/100
Opportunity Score
Moderate potential, but conditions must align.
At a glance
Funding available
Financing goals
- No objectives are currently available
Eligible Funding
- No Condition
Timeline
- Open continuously
Eligible candidates
Eligible Industries
- All industries
Location
- Canada
Legal structures
- For-profit business
Annual revenue
- All revenue ranges
Organisation size
- All organization sizes
Audience
- Canadians
Next steps
1
Determine your project
2
Validate your eligibility
Eligibility
Who is eligible?
- Canadian-controlled private corporations (CCPCs)
Additional information
- Allocation of the business limit must be shared among associated corporations within the same taxation year.
- Anti-avoidance rules are in place to prevent reduction of the passive income business limit through transfers or loans to related corporations that are not otherwise associated.
- Corporations must maintain detailed documentation to substantiate the purpose and timing of relevant transactions, particularly regarding transfers of investments or changes in fiscal year.
- For changes in fiscal year end, corporations must receive approval from the Canada Revenue Agency (CRA) by submitting a formal request with supporting details.
Documents and links
Frequently Asked Questions about the Small Business Deduction (SBD) Program
Here are answers to the most common questions about the Small Business Deduction (SBD). This section explains what the program is, how much funding is available, eligibility requirements, application deadlines, and other important details to help you determine if this grant is right for your business.
What is the Small Business Deduction (SBD)?
The Small Business Deduction (SBD) reduces corporate income tax for Canadian-controlled private corporations by providing a tax benefit on up to $500,000 of active business income annually. The program aims to support the growth of small businesses by encouraging active business operations within Canada.
Who is eligible for the Small Business Deduction (SBD) program?
To be eligible for the Small Business Deduction (SBD) program, you must:
The corporation must be a Canadian-controlled private corporation (CCPC).
The corporation's taxable capital employed in Canada must not exceed $15 million.
Who can I contact for more information about the Small Business Deduction (SBD)?
You can contact Canada Revenue Agency (CRA).
Where is the Small Business Deduction (SBD) available?
The Small Business Deduction (SBD) program is available across Canada.
Is the Small Business Deduction (SBD) a grant, loan, or tax credit?
Small Business Deduction (SBD) is a Tax Credits
Who are the financial supporters of the Small Business Deduction (SBD)?
Small Business Deduction (SBD) is funded by Canada Revenue Agency (CRA), Government of Canada
