Corporate Tax Tips
When Corporate Tax Has to Be Filed
So your corporation will need to file a T2 corporate tax return every year within six months of the end of its fiscal year.
(One of the advantages of incorporating your business is that you don’t have to have a fiscal year that corresponds to the calendar year, but you can have a fiscal year starting in any month and ending twelve months later.)
So if your corporation’s fiscal year ends on September 23rd, your corporation’s T2 tax return would have to be filed by March 23rd, six months later. If the filing deadline falls on a Saturday, Sunday, or statutory holiday, the Canada Revenue Agency will consider the return filed on time if it is sent on the first business day after the filing deadline.
When Corporate Taxes Must be Paid
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.
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.
The penalty for remitting taxes late is 5% of the unpaid amount and 1% per month on any past due amounts.