Every corporation subject to the Business Corporations Act is required to complete and file T2 Corporation Income Tax Return. This return is used by CRA to calculate federal income tax and credits. Corporations that have a permanent establishment in any province or territory other than Quebec or Alberta also use this return to report provincial and territorial income taxes and credits. Corporations with a permanent establishment in Quebec or Alberta must file a separate provincial return. All corporations including non-profit organizations, tax-exempt corporations, and inactive corporations, have to file a T2 return for every tax year, even if there is no tax payable. The only exceptions to this rule are tax-exempt Crown corporations, Hutterite colonies, and corporations that were registered charities throughout the year. A non-resident corporation has to file a T2 return if, at any time in the year
Every corporation is required to file its income tax return within six months of the end of each tax year. If you are late in filing corporate tax return CRA imposes a penalty of 5% of the unpaid tax that is due on the filing deadline plus 1% of this unpaid tax for each complete month that the return is late, up to a maximum of 12 months. The corporation tax return comprises of the following:
The owner or the designated officer of the corporation put his/her name and date and sign the return before submission to CRA. There are a series of schedules which you can attach with your corporate tax return. Not every schedule is important but you or your software select based on the information applicable to your corporation during the year. Schedule 1 calculates net income or loss for Income Tax Purposes, Schedule 4 reports Loss Continuity and Application, Schedule 8 records Capital Cost Allowance, Schedule 10 Cumulative Eligible Capital Deduction, Schedule 50 Shareholders Information, Schedule 100 Balance Sheet Information, Schedule 125 Income Statement Information, Schedule 500 Ontario Corporation Tax Calculations, and Schedule 546 Annual Return for Ontario Corporation. These schedules are very important and apply to almost all corporation operating in Ontario. You can get more information if you visit guide T4012.