Canada

Canada's individual tax summary reflects the 2025 federal budget and all 2026 provincial, and territorial budgets. The summary is based on enacted and proposed legislation and assumes that the proposed legislation will become law. Generally, budget proposals and draft legislation are enacted into law.

Federal personal income tax (PIT) rate

Recently enacted legislation reduces the lowest marginal PIT rate from 15% to 14.5% for 2025 and to 14% for 2026. See Personal income tax rates in the Taxes on personal income section for more information.

Voluntary Disclosures Program (VDP)

The Canada Revenue Agency (CRA) has revised its VDP for applications submitted after 30 September 2025. The changes simplify and allow greater access to, and enhance the benefit relief that may be obtained from, the VDP. See Voluntary Disclosures Program in the Tax administration section and our Tax Insights ‘The Canada Revenue Agency revises its Voluntary Disclosures Program effective October 1, 2025' at www.pwc.com/ca/taxinsights for more information.

Reporting requirements for trusts

Recently enacted legislation (i) reduces the number of trusts that would need to file a trust return (and report certain additional information), and (ii) defers the start of the revised bare trust filing requirement until the 2026 taxation year. See Reporting requirements for trusts in the Other issues section and our Tax Insights 'Finance proposes to reduce the scope of the enhanced trust reporting rules' (1 November 2024 update) at www.pwc.com/ca/taxinsights for more information.