Provincial and territorial income tax ▲
Resident trusts
A trust is liable for provincial or territorial tax at the rate that applies for the province or territory of residence if it was a resident of a province or territory on the last day of its tax year. Use the applicable provincial or territorial tax form to calculate the provincial or territorial tax.
If the trust was resident in the province of Quebec on the last day of its tax year, see the note in the section called "Which tax package should you use?" on page 6.
A resident trust may carry on a business with a permanent establishment in one of the following:
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a province or territory other than the province or territory of residence
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a foreign country
In these cases, you have to calculate the trust's income from each source to determine the liability for one of the following:
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provincial or territorial income tax
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federal surtax for income not subject to provincial or territorial tax
Report income from a business for each province, territory, or foreign country in which the business had a permanent establishment during the tax year. Send us a copy of this list. In general, you should allocate all other income to the province or territory of residence.
Use Form T3MJ, Provincial and Territorial Taxes Multiple Jurisdictions, to report this income. To get this form, go to canada.ca/cra-forms, or call 1-800-959-8281.
A trust resident in a province other than Quebec, or in a territory, on the last day of its tax year may have a federal foreign tax credit that is less than the non-business income tax the trust paid to a foreign country. If this is the case, the trust can apply the excess of foreign non-business income tax paid against provincial and territorial tax.
For more information, see "Line 23 - Federal foreign tax credit" on page 63.
Non-resident trusts and deemed resident trusts
A non-resident trust or a deemed resident trust that carries on a business with a permanent establishment in a province or territory is subject to provincial or territorial tax on the business income it earned in that province or territory.
A non-resident trust or a deemed resident trust may carry on a business in Canada without a permanent establishment in Canada. In this case, it may be subject to the federal surtax. For more information, see "Line 21 - Surtax on income not subject to provincial or territorial tax" on page 63.
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