The Mega Deduction in Northwest Territories

Northwest Territories corporations pay a combined 11.0% on small business income (federal 9% + provincial 2%) and 26.5% at the general rate (15% + 11.5%). Every dollar deducted in year one under the Mega Deduction reduces tax by that percentage.

The NWT general rate is 11.5%.

Tax reduction on a $100,000 purchase, by asset class

Does Northwest Territories follow the federal Mega Deduction?

Follows the federal rule Northwest Territories calculates corporate income tax on the same taxable income as the federal return. If the federal measure is enacted as drafted, Northwest Territories corporations would get the same 100% first-year deduction for provincial purposes. A province can legislate an exception, and we found no Northwest Territories announcement of one.

Who collects Northwest Territories corporate tax?

The Canada Revenue Agency administers the Northwest Territories Income Tax Act. One CRA return covers federal and territorial tax.

Has Northwest Territories said anything about this measure?

No statement on this measure was found in official sources.

Sole proprietors and partners

Northwest Territories personal income tax is filed on the same CRA return as federal tax, so the same result applies to sole proprietors and partners. The federal draft limits a non-corporate taxpayer to the income from the business or property source the asset is used in, so the deduction cannot create or deepen a loss.

Sources: NWT corporate income tax · NWT personal income tax. The federal measure: Department of Finance announcement · Draft legislative proposals. The Mega Deduction is draft legislation announced 15 September 2026; none of this applies until it is enacted.

What sales tax does to your deductible cost in Northwest Territories

Northwest Territories charges GST 5%, no territorial sales tax on most equipment purchases. A business registered for GST/HST recovers that tax through input tax credits, so it is not part of the capital cost and not part of what you deduct. Enter the price before tax in the calculator.

If you are not registered for GST/HST, the tax you cannot recover does form part of the capital cost. Most businesses buying equipment at this level are registered.

All asset types in Northwest Territories

• Computer equipment
• Software
• Manufacturing and processing equipment
• General equipment, tools and furniture
• Commercial vehicles (vans, pickups, work trucks)
• Heavy trucks and tractors
• Zero-emission vehicles
• Patents, licences and acquired IP
• Clean energy and energy conservation equipment
• Data network infrastructure
• Farm machinery
• Construction and contractor equipment
• Medical and dental equipment
• Restaurant and hospitality equipment
• Media production equipment
• Aircraft
• Buildings and additions
• Goodwill, franchises and licences (Class 14.1)
• Passenger vehicles (Class 10.1)
• Qualified liquefaction equipment