How to File Corporate Taxes in Canada
All corporations in Canada, except registered charities, have to file a corporate income tax (T2) return every tax year. You can file through the Internet using the Corporation Internet Filing system on the Canada Revenue Agency (CRA) website or file a paper return using forms you can download from the CRA website or order from CRA. You have to file the return within six months after the end of the corporation's fiscal period.
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Instructions
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Complete Chapter 1 of the tax return by providing identification details of your business, including business nNumber (BN), corporation's name and address, type of corporation and for which tax year the return is intended.
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Complete Chapter 2 by providing details about associated corporations, partnerships, foreign affiliates and non-arm's length transactions. Attach a General Index of Financial Information (GIFI) containing the corporation's complete financial statement information for the tax year.
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Provide details of the corporation's activities in Chapter 4. You will have to state your net income for the tax year and whether you have any tax deductions, for example from making donations.
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Calculate any applicable small business deduction (SBD) by completing Chapter 4 if your corporation is a Canadian-controlled private corporation (CCPC) throughout the tax year. This deduction reduces the tax the corporation has to pay.
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Claim any applicable general tax reduction on qualifying income that is subject to a tax rate of 38 percent by completing Chapter 5. Don't claim general tax reduction on income that gets preferential corporate tax treatment, including income eligible for small business deduction and investment income subject to refundable tax provisions.
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Calculate any refundable portion of Part I tax, refundable dividend tax on hand and dividend refund. Provide the details in Chapter 6 of the T2 return.
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Work out the Part I tax that applies to your corporation in Chapter 7. The basic rate is 38 percent of taxable income; surtaxes and tax credits might apply depending on your corporation's activities. Surtaxes and tax credits include corporate surtax, investment tax credit, federal tax abatement and federal logging tax credit.
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Create a summary of applicable federal, provincial and territorial taxes payable in Chapter 8. Also include the credits and refunds that reduce your total tax payable.
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Submit your T2 return through the Corporation Internet Filing system. Otherwise, deliver, mail or fax your paper T2 return to your local tax services office.
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