Your Corporate Tax Obligations
All resident corporations in Canada, whether active, inactive, for-profit, non-profit organizations, or tax-exempt corporations, must file a T2 corporation income tax return every year. This includes tax-exempt organizations, registered charities, and even corporations with no income. Filing corporate tax returns is mandatory under federal tax law and Canada Revenue Agency (CRA) regulations.
If you run a business in Toronto, our corporate tax accountants can help you file common corporate taxes on time.
Federal & Provincial Corporate Taxes
Corporations in Canada pay both federal and provincial taxes. At the federal level, the corporate tax rate is 15% on taxable income. In Ontario, Canadian-controlled private corporations (CCPCs) that qualify for the small business deduction usually pay a combined federal and provincial rate of 12.2% on the first $500,000 of active business income. Income beyond that is taxed at a combined rate of 26.5%.
Corporate Tax Return Deadline
Corporations must file their T2 return within six months of their fiscal year-end. For example, if your fiscal year ends on December 31, your T2 is due by June 30 of the following year. However, any balance owing is due two months after the year-end. Missing the deadline for filing the corporate income tax returns may result in extra charges.
Who Needs to File Corporate Taxes?
All incorporated businesses operating in Canada, including inactive ones, must file a T2 tax return each year. This includes corporations with no revenue, those temporarily closed, or newly formed businesses. Filing is required to stay compliant with CRA regulations.
We Ease the Complexity of Tax Season for Companies
Zen Tax provides full corporate tax services to help you meet your tax filing obligations. So, the tax season doesn’t have to be stressful. Our team serves as your dedicated corporate tax accountant in Toronto. Therefore, if you need help preparing the documents required to file tax returns, our team is ready to help.
Note that our services cover the full tax preparation and filing process, starting with the financial statements needed to file corporate income tax returns. These financial statements include your business’s balance sheet, income statement, and cash flow statement. We’ll also handle your T2 corporation income tax return.
Depending on your corporation’s activities, we may need to complete the following schedules and forms required to file your corporate tax returns in Toronto.
- Schedule 1: Next income or loss for your corporation’s tax purposes
- Schedule 8: Your capital cost allowance (used to claim depreciation on property)
- Schedule 50: Shareholder information (residency status and ownership percentages)
Other documents that may be needed to file your corporate tax returns include records for payroll and HST/GST remittances. These documents include employee wage and deduction tracking for CPP (Canada Pension Plan), EI (Employment Insurance), and income tax. Our corporate tax accountants in Toronto can help gather and compile these documents carefully.
For HST/GST, we ensure your collections, remittances, and input tax credits (ITCs) are properly documented. To support deductions and credits, we’ll help gather proof of eligible business expenses, such as rent, utilities, supplies, and professional fees. Note that records required for claims like the SR&ED (Scientific Research & Experimental Development) tax credit are also essential.
When you choose Zen Tax to handle your tax returns, our corporate tax accountants will ensure accuracy in every step, so your tax returns are complete and CRA-ready. Even if you’re in charge of an inactive corporation or a tax-exempt corporation, let our team help file your corporate tax returns.
Take Advantage of Deductions & Tax Credits
Our team understands the CRA’s evolving rules and works closely with you to claim every eligible tax credit and deduction.
Our skilled tax accountants in Toronto will analyze your financials and ensure your business is properly positioned to benefit from the deductions and tax credits it qualifies for. Here are some of the tax deductions and credits your corporation may qualify for:
|
Dedication / Tax Credit |
Description |
|
Capital Cost Allowance (CCA) |
Allows you to deduct the declining value of capital assets like equipment, vehicles, and buildings over time. It helps lower taxable income each year. |
|
Business Operating Expenses |
You can deduct costs such as rent, utilities, salaries, office supplies, and legal fees from your taxable income, which means reduced corporate tax. |
|
Research & Development (R&D) Tax Credits |
Supports innovation by offering tax credits on qualifying R&D expenses like wages and materials to eligible projects. It reduces corporate tax directly. |
|
Apprenticeship Job Creation Tax Credit |
This is a federal credit for employers who hire and train apprentices in eligible skilled trades. It reduces tax while investing in workforce skills. |
|
Small Business Deduction (SBD) |
Allows eligible Canadian-controlled private corporations to pay a lower tax rate on the first $500,000 of active business income. |
Catch-up on Books to Stay Ahead of the Tax Season
Falling behind on bookkeeping, even in corporations, is more common than most businesses admit. Whether it’s due to rapid growth or increased day-to-day activities, delayed record-keeping can quickly escalate into bigger tax issues. Don’t wait until your lagging bookkeeping and incomplete financial statements make it challenging to file corporate income tax returns. We can help.
At Zen Tax, we offer catch-up bookkeeping and accounting services that bring your financial records up to date, and fast. We help reconstruct missing entries, clean up errors, and organize your books to meet CRA expectations.
This corporate tax service is critical for timely and accurate corporate tax filing, loan applications, and informed decision-making. Indeed, we aim to give you a clear financial picture so you can understand your corporation’s financial status and relevant tax implications.
Why Choose Zen Tax for Corporate Tax Returns – Toronto
Zen Tax has been helping corporations and small business owners manage their tax responsibilities for over 30 years. With more than 10,000 consultations delivered and an average 5-star Google rating, our experience speaks for itself, and so do the results we help our clients achieve. Whenever you need a professional to assess your financial information and file your tax returns, we’re here to help.
At Zen Tax, we ensure your corporate tax filings are accurate, timely, and fully compliant with CRA regulations. We prepare and organize all necessary documents to support deductions and credits, ensuring you never miss a deadline.
All our services will be customized to match your business needs and goals.
Experience Stress-Free Corporate Tax Return Filing
Contact us and schedule a free, initial consultation. The corporate tax accountants at Zen Tax believe that filing corporate taxes doesn’t have to be overwhelming. That’s why we provide clients with a professional assessment of financial statements and financial information. We help keep these records up-to-date to streamline the process of filing taxes.
Whether you’re behind on bookkeeping or looking for ways to reduce tax legally, we’re ready to step in. Contact us today to schedule your consultation and keep your business moving forward.
FAQ / Resources
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Yes. All resident corporations, non-profit organizations, and even inactive corporations must file their T2 returns each tax year, even when there’s no tax payable. Note that registered charities, Crown corporations, and Hutterite colonies don’t need to file T2 returns.
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You face a penalty (5% of the unpaid tax) that’s due on the tax filing deadline. There’s an extra 1% of the unpaid tax for each month your returns are late, for up to 12 months.
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Yes. However, you should know that corporate taxation is complex, and some errors could cost you more than hiring our accountants in Toronto would. Zen Tax has diverse experience using the general index of financial information to ensure accurate corporate tax returns for our clients.
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Use the T2 Short Return Form to file nil returns for your corporate tax. This form is designed for corporations and small businesses with no income. Note that Zen Tax can help file such tax returns on time.
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Generally, shareholders aren’t held responsible for taxes in Ontario, unless CRA considers certain shareholders directors. This is common in closely held corporations. Consult Zen Tax if you’re facing a complex corporate tax issue.
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You’ll need financial statements, payroll records, HST/GST remittance info, and documents supporting deductions and credits.
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Yes. We apply proven strategies like income deferral, proper structuring, and legal deductions to reduce your tax burden. Remember, we’ll first assess your financial information and identify opportunities to apply deductions, tax credits, and other legal strategies to reduce the amount of corporate taxes owed.
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