Who has to file a corporation income tax return (T2)
All resident corporations (except tax-exempt Crown corporations, Hutterite colonies and registered charities) have to file a T2 return for every tax year, even if there is no tax payable. This includes:
A non-resident corporation must file a return if, at any time in the year, one of the following situations applies:
This requirement applies even if the corporation claims that any profits or gains realized are exempt from Canadian income tax due to the provisions of a tax treaty.
The corporation’s tax year is its fiscal period, which cannot be longer than 53 weeks (371 days).
You can declare your tax year on your first T2 return after incorporation. Make sure the financial statements or the General Index of Financial Information (GIFI) you attach to the return match the tax year of the return.
On your first T2 return after incorporation, use the date of incorporation as the tax year start. For all subsequent returns, your tax year start will be the day after your tax year-end.
File your return no later than six months after the end of each tax year. The tax year of a corporation is its fiscal period.
When the corporation’s tax year ends on the last day of a month, file the return by the last day of the sixth month after the end of the tax year.
When the last day of the tax year is not the last day of a month, file the return by the same day of the sixth month after the end of the tax year.
Corporations have to pay income tax in monthly or quarterly instalments, unless the total of Part I, Part VI, Part VI.1, and Part XIII.1 taxes payable for either the previous year or the current year is $3,000 or less.
The balance of tax the corporation owes for a tax year is due within either two or three months of the end of that tax year, depending on the circumstances of the corporation.
Interest and penalties apply to late payments. To be on time, you have to make instalment payments and other payments on or before the due date
Generally, all corporation taxes (with the exception of Part III and Part XII.6) are due two months after the end of the tax year. However, the tax is due three months after the end of the tax year if the following conditions apply:
If you file your return late, a penalty applies. The penalty is 5% of the unpaid tax that is due on the filing deadline, plus 1% of this unpaid tax for each complete month that the return is late, up to a maximum of 12 months.
The corporation will be charged an even larger penalty if we issued a demand to file the return under subsection 150(2), and if we assessed a failure to file penalty for the corporation in any of the three previous tax years. The penalty is 10% of the unpaid tax when the return was due, plus 2% of this unpaid tax for each complete month that the return is late, up to a maximum of 20 months.
Process of online income tax return filing with Taxreturnfilers eCPA
Below you'll find answers to the questions we get asked the most about Tax Return Filing.
After you have completed the payment process, you can upload the documents on the dashboard. Details of the expert assigned to your case would be visible on the same dashboard. You may get in touch with our team whenever required.