A corporation that is resident in Canada, carried on a business in Canada, has a taxable capital gain, or sold taxable Canadian property is required to file a T2 income tax return even if no tax is payable.
Knowing when the return is due, and more importantly when the tax is payable is important to avoid costly interest and penalties.
Be aware that the due date for filing is different than the day the corporation must pay it’s outstanding tax bill.
Corporate Filing Due Date
The due date to file your corporate income tax return is six (6) months following your corporation’s year end.
For example, if you have a
- December 31st year-end –> Return is due June 30th.
- March 31st year-end –> Return is due September 30th.
When Corporate Taxes Must be Paid
Existing corporations are required to pay tax by installments throughout the year if their income tax bill is more than $3,000. New corporations are exempt from the installment requirements in their first year.
If you have a new corporation, or if you will have a balance owing, knowing your due date will help ensure you avoid costly penalties.
Due Date for CCPC
The due date for a Canadian controlled private corporation, claiming the small business deduction and whose taxable income is less than $500,000, is three months following the corporations’ year-end.
- December 31st year-end –> Balance is payable by March 31st.
- June 30th year-end –> Balance is payable September 30th.
For all other corporations, the due date is two months following their year-end.
The penalty for remitting taxes late is 5% of the unpaid amount and 1% per month on any past due amounts.
A tax bill of $10,000 can result in a penalty of $500 if remitted late.
When To Meet With Your Accountant
It’s important to plan filing your corporate tax return before the end of the corporation’s fiscal year (get the Tax Rebate contact number to find out more details).
If you have a fiscal year-end that does not fall on December 31, you should meet with your accountant around December 31st to ensure that your annual tax slips are prepared and filed on time.
If you’re looking for help filing your corporate tax returns and related tax-slips, please give me a call at 289-288-1206 to get started. I can help you reduce the amount of tax you will pay by taking full advantage of the corporate structure.