In Canada all corporations must file a T2 income tax return each year, even if there is no tax due.  This includes non-profits, tax-exempt, and inactive.  In addition, non-resident corporations are required to file a T2 in specific circumstances.  There are two types of T2 returns, a short return and a longer version simply called Corporation Income Tax Return.

 •        Corporation return – This is nine pages and can be used by any corporation.  However, there are also a number of Schedules to complete and other financial statements required.

•        Short return – This is only two pages plus three schedules.  Not all corporations are eligible to file a short return and you should check with your accountant if you are unsure.

 In order to complete either return, you will need the following information.

 •        Company name and address

•        Business number from the CRA

•        Full names, addresses and residence country for all shareholders

•        Full names, addresses and residence country for all authorized corporate signature shareholders

•        Complete financial statements filed with the GIFI

•        Company's main activities

•        Sources of income

•        Whether shareholders own shares in other companies

•        Whether the company is associated with other companies

•        Performs activities or owns property abroad

•        All Canadian provinces where it has activities

•        Dividends paid and received

•        Fixed assets acquired or sold

You are going to need a lot more information but these are the basics.

Undoubtedly the easiest way to file a T2 is to use the services of an accountant.  You will be required to sign a T183 which will allow the accountant to file your return electronically.  If you prefer DIY there are some good software programs that will work.  For the non-professional, there is a greater chance of errors or omissions.

If your company has gross revenues over $1 million, you must file electronically; paper is not acceptable.

The deadline for filing is within six months of the end of the corporation's tax year.  If the tax year ends on the last day of the month, you have until the last day of the sixth month following the year-end.  Here are some examples.

•        Tax year ends December 31 and the filing deadline is June 30

•        Tax year ends July 31 and the filing deadline is January 31

If the corporation's tax year does not end on the last day of a month, then you have exactly 6 months from the date of the corporate year-end.

As you can tell, filing a corporation tax return can become very involved and complicated.  It is not an especially easy task and that is why most corporations use a professional accountant to deal with the matter.  As you narrow down your search for an appropriate accounting firm, be sure to ask about their procedures for filing your return and their experience dealing with the CRA.  Keeping up with the tax laws can be difficult.  Ask about their process for this as well.  With the right questions, you can find the best accountant for your tax filing needs.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team