Home>>Business>>All you Need to Know About Corporate Tax Filing

All you Need to Know About Corporate Tax Filing

If you are a participant of Canada’s labor force, you must be aware of the fact that you have to file a tax return. Undoubtedly it is a stressful procedure but you have no way to avoid it. Now what about corporations? Do they require to file a tax return?

Well, apart from the tax exempt crown corporations, registered charities and Hutterite colonies, all resident corporations are supposed to file a corporation income tax return every tax year. These organizations include

– Nonprofit organizations
– Tax exempt corporations and
– Inactive corporations

How to file a tax return

Most of the corporations have the options to file their tax return online or manually. If you prefer to do the procedure online then make sure you use tax preparation software and applications that have been certified by the Canada Revenue Agency or suitable for corporation internet tax filing.

When it comes to the corporations that exceed an annual income of $1 million mandatorily have to file it online. Apart from Insurance Corporation, corporations reporting in functional currency, non- resident corporations and corporation that are exempt from tax payable under 149 of the income tax act have to file their tax returns in this way. In certain situations nonresident corporations also have to file t2 return.

Here are the ways to file your corporate tax return electronically

– With the help of CRA’s Corporation Internet Filing service, or
– With the help of CRA’s My Business Account; or
– By Printing the T2 Bar Code Return and mailing or sending it to the CRA

Obligations that require a corporation to file a tax return


Corporations are supposed to file income tax in Canada. The government forces corporation to abide by the rule only under the following situations

– A corporation, having an establishment in the area has to file a tax return
– if the company in question was an insurance company that practices one of the rights of a corporation in Canada, or that follow a corporate purpose, owner of a property or has a firm in Canada, it also has to file a business income tax return.
– If the corporation had a taxable Canada property, even if it does not have a business in Canada and did not stay in Canada it also falls under the same category.
– Finally if the corporation was a nominee or was subjected to a special tax it mandatorily has to file a tax return.

Time limitation to file tax return

A corporation has to file a T2 corporate tax every year within six months of the end of its fiscal year

Bankruptcy of a corporation does not really spare it from filling the tax return. In fact the corporation that goes through a bankruptcy during a taxation year has to file tax returns twice for the period in question. The period starts from the first day of the tax year and ends on the day before the bankruptcy date. The second one begins on the date of bankruptcy and ends at the end of the tax year.