The Mega Deduction in Nunavut
Nunavut corporations pay a combined 12.0% on small business income (federal 9% + provincial 3%) and 27.0% at the general rate (15% + 12%). Every dollar deducted in year one under the Mega Deduction reduces tax by that percentage.
Nunavut's small business rate is 3%.
Calculate a purchase in Nunavut
Tax reduction on a $100,000 purchase, by asset class
| Asset | Class | Old year-one deduction | Tax reduction, small business | Tax reduction, general |
|---|---|---|---|---|
| Computer equipment | 50 | $27,500 | $12,000 | $27,000 |
| Software | 12 / 10 | $50,000 | $12,000 | $27,000 |
| Manufacturing and processing equipment | 43 / 53 | $15,000 | $12,000 | $27,000 |
| General equipment, tools and furniture | 8 | $10,000 | $12,000 | $27,000 |
| Commercial vehicles (vans, pickups, work trucks) | 10 | $15,000 | $12,000 | $27,000 |
| Heavy trucks and tractors | 16 | $20,000 | $12,000 | $27,000 |
| Zero-emission vehicles | 54 / 55 | $15,000 | $12,000 | $27,000 |
| Patents, licences and acquired IP | 44 | $12,500 | $12,000 | $27,000 |
Does Nunavut follow the federal Mega Deduction?
Follows the federal rule Nunavut calculates corporate income tax on the same taxable income as the federal return. If the federal measure is enacted as drafted, Nunavut corporations would get the same 100% first-year deduction for provincial purposes. A province can legislate an exception, and we found no Nunavut announcement of one.
Who collects Nunavut corporate tax?
Nunavut's tax collection agreement authorizes the Canada Revenue Agency to administer and collect its income taxes.
Has Nunavut said anything about this measure?
No statement on this measure was found in official sources.
Sole proprietors and partners
Nunavut personal income tax is calculated on federal taxable income, 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: Nunavut 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 Nunavut
Nunavut 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 Nunavut
- 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
Free: the Year-End Purchase Checklist (PDF)
One page. What qualifies, what does not, the 'available for use' trap, and the seven questions to ask your accountant before you buy. No spam, unsubscribe any time.
The Mega Deduction Year-End Playbook
Everything you need to walk into your accountant's office with a plan instead of a question. Built for owner-managed Canadian businesses that expect a profitable 2026.
- Excel purchase planner with every province's rates and every CCA class pre-loaded. Model up to 12 purchases, see the year-one deduction, tax reduction and 10-year comparison for each.
- The 46-page Playbook (PDF): eligibility by asset class, the exclusions, 'available for use' rules, financing vs. leasing, recapture risk, CCPC vs. sole proprietor, and worked examples for 12 industries.
- Accountant brief template (Word): a one-page memo you fill in and send so your accountant can confirm the plan in one email instead of a meeting.
- 30-day action plan for purchases that must be delivered and installed before your fiscal year-end.
$97$47 CAD one-time, instant download
Secure checkout by Stripe. Files delivered immediately after payment. Not tax advice; every plan should be confirmed by your accountant.