Corporate taxes in Canada can be complex—but every corporation must file them, even with zero income or zero taxes owing.
Accurate T2 filing is essential for remaining compliant with the Canada Revenue Agency (CRA) and for minimizing potential penalties, interest, and audit risks.
What Is a T2 Corporate Tax Return?
Every corporation that is resident in Canada must file a T2 Corporation Income Tax Return each year.
Unlike personal tax filings, corporate tax returns involve a full financial disclosure, including:
- Balance sheet and income statement
- Shareholder and ownership information
- Dividends and distributions
- Payroll details
- GST/HST filings and adjustments
- Tax credits & deductions
- Provincial tax calculations
Because of these additional components, corporate tax preparation is substantially more complex than individual tax returns—making professional guidance highly beneficial.
Who Must File Corporate Taxes?
✔ Canadian-resident corporations
All resident corporations must file a T2 return every year, regardless of whether they had activity, revenue, or profit.
✔ Non-resident corporations
A non-resident corporation must file a Canadian T2 if it:
- Carries on business in Canada
- Disposes of taxable Canadian property
- Realizes a taxable capital gain in Canada
If you operate a foreign corporation with ties to Canada, consult a cross-border tax specialist to determine your filing obligations.
Filing & Payment Deadlines
📌 Filing deadline
A T2 corporate tax return is due six months after the corporation’s fiscal year-end.
📌 Tax payment deadline
Most corporations must pay their taxes two months after year-end.
📌 CCPC exception
If the corporation is a Canadian-Controlled Private Corporation (CCPC) earning active business income, taxes are due three months after year-end.
Failing to file or pay on time leads to penalties and interest—none of which are tax-deductible.
Choosing Your Fiscal Year-End
Your fiscal year-end determines all major CRA deadlines.
New corporations may choose any date within 365 days of incorporation.
Many business owners mistakenly assume they must use December 31, but other year-end dates may:
- Better align with seasonal business cycles
- Improve cash flow
- Offer tax-deferral opportunities
Professional guidance is recommended when selecting or changing a corporate year-end.
Special case: Professional Corporations
Professional corporations (doctors, lawyers, accountants, etc.) that are part of a partnership must use December 31 as their year-end.
They also follow unique provincial regulatory requirements—though most tax advantages of CCPCs still apply.
Corporate Tax Rates & the Small Business Deduction (SBD)
Most private Canadian companies qualify as CCPCs, giving them access to reduced tax rates on the first portion of active business income through the small business deduction.
To benefit from the SBD:
- The corporation must be a CCPC
- Income must be active business income
- Returns must be filed within six months
- Taxes must be paid within three months
Provincial Corporate Tax Filing Requirements
Corporate tax return filing varies by province:
✔ Alberta & Québec
Require separate provincial tax filings, in addition to the T2.
✔ All other provinces
The CRA administers provincial corporate taxes on their behalf—no separate provincial return required.
Corporate Tax Credits & Deductions
Businesses may qualify for numerous credits and deductions, including:
- Investment Tax Credit (ITC)
- SR&ED (Scientific Research and Experimental Development)
- Small business deduction
- Capital cost allowance (CCA)
- Charitable donations
- Loss carryovers
Knowing which incentives apply requires expertise—incorrect claims can trigger audits or delays.
Benefits of Using a Professional Corporate Tax Accountant
Partnering with an experienced corporate tax accountant provides:
✓ Deep knowledge of corporate tax rules
✓ Correct identification of eligible credits & deductions
✓ Accurate calculations and reduced risk of CRA penalties
✓ Significant time savings
✓ Consistent tax planning to reduce long-term liability
✓ Peace of mind during tax season
A professional service ensures your corporation stays compliant while maximizing your available tax benefits.
Making Corporate Tax Filing Easier
At Taxdeep, we streamline the entire process by managing your bookkeeping and ensuring your financial records are accurate throughout the year. This eliminates last-minute scrambling and minimizes questions during tax season because we already have everything needed for a complete and accurate return.