Structure

Moving your corporation to another province

Which province taxes your corporation depends on where it actually operates, not where it was incorporated. What to register, what to file, what to skip.

By Matthew Reeves, FounderAugust 16, 2026 · 8 min read

Summary

Moving a business to another province can mean changing its corporate registration or its actual operations, and only the second necessarily changes its tax bill.

The first is your corporation’s home jurisdiction, meaning the government whose corporations law it was created under, and changing that is called a continuance. The second is where your corporation pays tax, which depends on its permanent establishments (e.g. an office, a shop or a warehouse it genuinely operates from). An Ontario-incorporated company working only out of Calgary pays Alberta corporate tax and no Ontario corporate tax, and the reverse holds for an Alberta-incorporated company working out of a Toronto office. Move the premises and the tax follows, but move the corporation onto another province’s corporations law, which is all a continuance does, while you keep working from your old home office, and nothing moves at all.

We generally recommend the cheaper route: leave your home jurisdiction alone, register the same corporation to carry on business in the new province, and close the old location for real by ending the lease, moving the equipment and stopping the payroll. Four pieces of housekeeping follow in the month you move.

In your payroll software, change each person’s province of employment, meaning the province they report to work in rather than the one they live in. Change your own as well, because otherwise the wrong province’s tax comes off every cheque all year.
Register with the new province’s workers’ compensation board, because each board only covers work performed in its own province, and cancel the old registration once nobody works there.
Register for the new province’s own sales tax if it has one, and close the account in the province you’re leaving.
Check your rate if you use the quick method, the Canada Revenue Agency’s optional shortcut for GST/HST (i.e. the federal sales tax, harmonized with the provincial one in some provinces). The flat percentage of sales you remit under it is set partly by where your premises are.

Take the continuance route instead only where your home jurisdiction costs you something real, such as a law society or another professional licensing body that will license only a corporation incorporated in its own province. Outside the licensed professions you’ll rarely meet one. Our corporate tax calculator shows what the same profit pays in each province before you move.

Permanent establishment, and the year you move

Nothing in Canada’s income tax rules looks at your certificate of incorporation, so incorporating into a low-rate province buys you nothing by itself. What the rules look for instead is a permanent establishment, defined as a fixed place of business of the corporation. The examples they give are an office, a factory, a workshop and a warehouse.¹ A corporation with no fixed place of business anywhere still has one, at the principal place where its business is actually conducted. For a consultant working out of the spare room, that place is the home. An employee or agent based in another province who can sign contracts for your corporation creates one there as well, even though you have no office in that province.¹

One permanent establishment and nothing outside that province means all of your profit is taxed there, and a province you have no establishment in taxes none of it. In the year you move you’ll usually have one in both provinces, and the two of them split your taxable income (i.e. profit after every deduction the rules allow) between them. The split uses each province’s share of your revenue and of the salaries you paid, your own salary included but not dividends you pay yourself.² Moreover, the split runs across your whole fiscal year, which is the twelve-month period your corporation reports on and needn’t run January to December, rather than stopping on the date you moved. Close an Ontario office on May 31, open a British Columbia one on June 1, and both provinces have a claim on the entire year. Having a permanent establishment in two provinces also means filing Schedule 5 with your T2 return, which is the return reporting your corporation’s income for the year.³

Registering in the new province, or continuing into it

The corporate registry in the province you now work in wants to know you’re there. Registering an existing out-of-province corporation to carry on business there is called extra-provincial registration, and it leaves your home jurisdiction untouched. What counts as carrying on business is broader than most owners expect, and Alberta’s list runs from soliciting business to keeping a representative or owning land there.⁴ British Columbia gives an out-of-province corporation two months to register, counted from the day it begins carrying on business in the province, and charges $350 for the registration statement plus $30 to reserve the name, which a federal corporation doesn’t need.⁵ Windows and fees differ province by province, so we’d confirm yours before the move rather than after it. What registration costs you is an annual filing in two registries instead of one, for as long as the corporation exists.

Continuance is the other route, where your corporation leaves one government’s corporations law and arrives under another’s. The corporation survives as the same legal person, so its property, its obligations and any proceedings carry through.⁶ What that buys you is one clean corporate history, which is easier for a buyer’s or a lender’s lawyers to review. What it costs is a shareholder vote needing two-thirds approval rather than a bare majority. Owning all the shares makes that a form you sign, and a partner holding more than a third makes it an obstacle.⁷ Add legal fees and the $200 federal filing fee charged online in 2026, and a continuance has cost you real money and changed your tax outcome by nothing at all.⁸

Alberta and Quebec

Alberta and Quebec collect their own corporate income tax, rather than letting the CRA collect it alongside the federal corporate tax on one return. A permanent establishment in Alberta at any time in the year means an annual AT1 return, due six months after your year-end (June 30 for a December 31 year-end). A narrow filing exemption exists, and a corporation that moved into or out of Alberta during the year can’t use it.⁹ A permanent establishment in Quebec means a CO-17 return filed with Revenu Québec, whose payment and filing deadlines are covered in our Quebec guide. Quebec also attaches extra conditions to its reduced corporate rate. A solo service company can miss the hours test, but prior-year hours across associated companies or qualifying primary and manufacturing activity can change the result. Even a dividend-only majority owner can count recorded unpaid work under a special rule, so use the Quebec guide’s qualification tests before assuming the full provincial rate.¹⁰

Payroll, sales tax and workers’ compensation

Box 10 of the T4, which is the annual slip reporting an employee’s pay, carries their province of employment. That province is where the employee reports for work rather than where they live.¹¹ Box 10 has to be changed deliberately in payroll when the office moves. Until it is, the wrong province’s tax is withheld for the rest of the year, and the difference lands on the employee’s own personal return.

Workers’ compensation runs board by board, and each board covers work performed in its own province. Whether the destination board wants you registered turns on day counts and on whether you’re already covered at home. WorkSafeBC, for one, wants an out-of-province business registered once it hires British Columbia workers, or once it intends to work in the province for 15 or more days in a calendar year, which a permanent move clears comfortably.¹²

For an ordinary service, GST/HST usually follows the customer’s address under the place-of-supply rules, so your move alone may leave the rate unchanged.¹³ What you keep can change, because the flat percentage you remit under the quick method is read off a table by the province your permanent establishment sits in and by where you make the supply. A move can therefore change your rate even when your customers don’t. Note that the quick method is closed to bookkeeping, tax preparation, tax and financial consulting and to legal and accounting practices, along with anyone over $400,000 of worldwide taxable supplies.¹⁴ Four provinces also run a sales tax of their own outside the federal system (i.e. a second tax you register for, charge and remit separately), namely British Columbia and Saskatchewan with a provincial sales tax or PST, Manitoba with a retail sales tax or RST, and Quebec with a Quebec sales tax or QST.

How often this changes

The machinery here is stable, and both the permanent establishment test and the formula splitting income between provinces have sat in the Income Tax Regulations for a long time. What moves underneath them is provincial: corporate rates, how much profit qualifies for a province’s reduced rate for small companies, sales tax scope and registry fees.¹⁵ British Columbia is the live example: it legislated provincial sales tax on accounting, architecture, engineering and geoscience, security and non-residential real estate services from October 1, 2026, then paused it in September 2026 by exempting them all from October 1.¹⁶ A pause isn’t a repeal, so if you sell those services into British Columbia we’d recheck the province’s position before relying on it. Re-check which provinces you have a permanent establishment in whenever you open or close a location, hire your first employee in a second province, or buy or sell property.

Closing thoughts

Most of what makes a provincial move expensive has nothing to do with tax. The cost sits in small registrations that keep running in the province you left, or never start in the province you arrived in. One is the sales tax return you still have to file every period reporting zero, with penalties if you don’t, on an account nobody closed. Another is a payroll province that stayed put while everything else moved. Neither is hard on its own, and neither announces itself, so copy the four-item checklist in the summary somewhere you’ll see it before the truck arrives.

How we handle it

We treat a move as a checklist rather than a decision. First comes where your permanent establishments genuinely sit once the dust settles, then the extra-provincial registration in the destination and its deadline. Schedule 5 and the allocation follow if two provinces have a claim, along with Alberta’s AT1 where required. Cadence doesn’t prepare Quebec returns, so we’d arrange the handoff to a Quebec adviser if a CO-17 is needed. The payroll, sales tax and workers’ compensation accounts open and close in the same month, and your corporate and personal returns are prepared in one file.

Income Tax Regulations, section 400(2), which defines a permanent establishment as a fixed place of business. The full list is an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop and a warehouse. Paragraph (a) covers a corporation with no fixed place of business, where the permanent establishment is “the principal place in which the corporation’s business is conducted”. Paragraph (b) deems one where an employee or agent established in a place has general authority to contract. The same paragraph covers an agent holding a stock of merchandise from which orders are regularly filled. Paragraph (d) deems land owned in a province to be one, where the corporation otherwise has a permanent establishment in Canada. Paragraph (e) does the same for substantial machinery or equipment used in a place at any time in the year, meaning production or heavy equipment rather than a laptop and a work vehicle. Paragraph (e.1) is a backstop, deeming a permanent establishment at “the place designated in its incorporating documents or bylaws as its head office or registered office”. Paragraph (e.1) applies only where the corporation would otherwise have none at all, which paragraph (a) makes rare. Paragraphs (f) and (g) confirm that dealing through an independent broker or commission agent, or having a subsidiary in a place, doesn’t by itself create one. Source: Department of Justice Canada, current to 2026-06-17 and last amended 2026-03-26. Verified 2026-08-16. ↩ ↩²
Income Tax Regulations, section 402. Subsection (1) covers the single-province case and subsection (2) the province with no establishment. Paragraph (3)(a) sets the formula, which weights gross revenue and salaries and wages equally, and three or more provinces work the same way. Paragraphs (3)(b) and (3)(c) deal with a year where revenue or salaries are nil. Paragraph (4)(g) attributes revenue from services to the province the services were rendered in, rather than the province the client sits in. Allocation also drives the federal abatement, a deduction from tax payable equal to 10% of taxable income earned in a province under Income Tax Act section 124(1). The abatement is how the federal government makes room for provincial corporate tax. Source: Department of Justice Canada, current to 2026-06-17. Verified 2026-08-16. ↩
Canada Revenue Agency, form T2SCH5, “Tax Calculation Supplementary - Corporations”. The CRA describes it as a schedule for corporations with a permanent establishment in more than one jurisdiction, or claiming provincial or territorial tax credits or rebates. Note that “jurisdiction” is wider than province, and that a corporation with no taxable income still completes the allocation columns. Verified 2026-08-16. ↩
Government of Alberta, Corporate Registry, “Register an out-of-province corporation”. The full list also treats an Alberta address in a directory or an advertisement as carrying on business, along with being licensed or required to be licensed in the province. Registration requires an agent for service located in Alberta, plus a NUANS report dated within the last 91 days, meaning a search of Canadian corporate names, ordered from a private search house, confirming that yours isn’t already taken. A corporation with a number name, or one formed under the Canada Business Corporations Act, is excepted from the report. Verified 2026-08-16. ↩
Business Corporations Act (British Columbia), section 375(1) for the two-month window and section 375(2) for the deemed carrying-on-business tests, current to 2026-08-11. Fees are from BC Registries and Online Services, which charges $350 for the registration statement and $30 for a name request, and states that federal corporations don’t require a name reservation. An extraprovincial company then files an annual report within two months of the anniversary of its registration, so the second registry is a recurring obligation rather than a one-off. Note that the corporate-law test for registration is broader than, and separate from, the permanent establishment test in the Income Tax Regulations. Verified 2026-08-16. ↩
Canada Business Corporations Act, section 187(7). On a continuance the property continues to be the corporation’s property, and the corporation continues liable for its obligations. Existing causes of action, claims and proceedings are unaffected, and the section says nothing about the corporation’s CRA business number, which is an administrative matter, so that point is flagged for the reviewer rather than asserted here. Source: Department of Justice Canada, current to 2026-06-17. Verified 2026-08-16. ↩
Canada Business Corporations Act, section 188(5), under which an application for continuance becomes authorized when the shareholders voting on it approve by special resolution. Section 2(1) defines a special resolution as one passed by not less than two-thirds of the votes cast, or signed by all shareholders entitled to vote on it. Under sections 190(1)(d) and 190(3), a shareholder who follows the statutory objection procedure is instead entitled to be paid the fair value of their shares, which the corporation has to fund in cash. That procedure means a written objection before the vote, a demand for payment within twenty days of learning the resolution passed, and share certificates delivered within thirty days. Provincial corporations statutes have their own equivalents, which may differ. Verified 2026-08-16. ↩
Corporations Canada, “Services, fees and processing times”, showing $200 online with one-day processing to continue a corporation into the Canada Business Corporations Act, plus $100 for four-hour express service. Continuing out of the federal jurisdiction is free with ten-day processing, though the Letter of Satisfaction it requires carries its own fee. Two registries also have to process the paperwork one after the other, so the elapsed time is longer than either fee schedule suggests on its own. Verified 2026-08-16. ↩
Government of Alberta, “Corporate income tax”, under which AT1 returns are due within six months of the end of the corporation’s tax year. The exemption is in the Government of Alberta’s “Alberta Corporate Income Tax Filing Exemption Checklist” (January 2025), which exempts a corporation only where it meets every criterion in a list. Those criteria include being a Canadian-controlled private corporation throughout the year, having no permanent establishment outside Alberta at any time in the year, and having no taxable income. The rest are not being entitled to a refund, having gross revenue of $500,000 or less, filing a federal T2, and holding the same discretionary tax account balances for Alberta and federal purposes. A corporation that moved into or out of Alberta during the year fails the second of them. See also Information Circular CT-2R11, “Corporate Income Tax Filing and Payment Requirements” (September 2025). Verified 2026-08-16. ↩
Taxation Act (Québec), CQLR chapter I-3, sections 771.1, 771.2.1.2 and 771.2.1.2.1, consolidated to 2026-04-01 on LegisQuébec. The corporation needs more than 5,000 remunerated hours across its employees to reach the deduction at all. The rate is reduced on a straight line between 5,000 and 5,500 hours, and full value takes at least 5,500. Hours count at no more than 40 a week per person. A majority shareholder’s unpaid working hours are deemed remunerated at 1.1 times the hours worked in the week, with that input capped at 36.36 hours. One working owner therefore counts for roughly 2,080 hours in a year and two for roughly 4,160, both below the 5,000-hour floor. A separate route into the deduction exists for primary and manufacturing sector corporations. Verified 2026-08-16. ↩
Canada Revenue Agency, “T4 slip”, where box 10 is the province of employment and the CRA states that it isn’t always the province where the employer is located. Guide T4001, “Employers’ Guide to Payroll Deductions and Remittances”, adds a rule for the fully remote employee. Where someone works under a full-time remote work agreement and never physically reports anywhere, the CRA looks at the establishment they can reasonably be considered attached to. Verified 2026-08-16. ↩
WorkSafeBC, “Out of province”. An out-of-province business needs WorkSafeBC coverage if it hires British Columbia workers, or if it has no workers’ compensation coverage in its home jurisdiction. A business that does have home coverage needs WorkSafeBC coverage if it intends to work in British Columbia for 15 or more days in the calendar year using only out-of-province workers, or for 10 or more days over three or more visits. The same page states that workers who work and reside outside British Columbia aren’t covered by a British Columbia employer’s account, which is the mirror image of the same rule. Other boards set thresholds of their own, so the destination board decides this rather than WorkSafeBC. Verified 2026-08-16. ↩
Canada Revenue Agency, “Charge and collect the tax: which rate to charge”, whose own worked example has a Vancouver store delivering to a customer in Toronto and charging Ontario’s rate rather than British Columbia’s. The rule that matters is the place of supply, which follows the customer. Verified 2026-08-16. ↩
Canada Revenue Agency, Guide RC4058, “Quick Method of Accounting for GST/HST”, page modified 2025-07-21. The rate depends on whether the supply is made in a participating or a non-participating province, on whether the permanent establishment making it sits in a participating or non-participating province, and on the type of business. More than one rate can apply to one company, and businesses that buy goods for resale read their rates off a different table from service providers. Eligibility requires a permanent establishment in Canada and 365 days of continuous business. It also requires revenues including GST/HST from worldwide taxable supplies, with those of associates, of no more than $400,000 across four consecutive fiscal quarters out of the last five. The excluded list covers persons providing bookkeeping, financial consulting, tax consulting or tax return preparation services in the course of commercial activities. It also covers persons providing legal, accounting or actuarial services in the course of their professional practice. Verified 2026-08-16. ↩
Most provinces cap the profit qualifying for the reduced rate at the federal limit of $500,000 of active business income a year, meaning profit from actually running the business rather than from rent or investments. Our guide on what changed for 2026 states that limit in full. Nova Scotia sets $700,000, and both Prince Edward Island and Saskatchewan set $600,000. Source: Canada Revenue Agency, “Corporation tax rates”, page dated 2025-05-30. Verified 2026-08-16. ↩
British Columbia Notice 2026-001, “Notice to providers of professional services”, last updated September 21, 2026, opens by saying the expansion “is paused”. The services it lists are accounting including bookkeeping, architecture, engineering and geoscience, security including private investigation, and non-residential real estate services. As legislated, the 7% was to apply to the purchase price of each, except architectural, engineering and geoscience services. For those services the Notice puts the 7% on 30% of the purchase price, an effective 2.1% by our arithmetic. The tax comes from section 86 of the Budget Measures Implementation Act, 2026. The Provincial Sales Tax Act’s table of legislative changes, current to September 15, 2026, puts it in force on October 1, 2026. The pause is Order in Council 408/2026, approved September 21, 2026 as British Columbia Regulation 116/2026. From October 1, 2026 it exempts each of the five services from the tax, and it sets no end date. The Office of the Premier announced the pause in a news release of September 18, 2026, calling the regulation temporary. All verified 2026-09-24. ↩

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