If you are part of Canada's labour force, you know you have to file a tax return. Although this task is tedious and stressful, it remains an unavoidable one that occurs from year to year. But what about corporations? Is a corporation required to file a tax return?
Obligations that require a corporation to file a tax return
In Quebec, corporations are required to file an income tax return. Essentially, the government forces a corporation to comply with this rule if, during the year, it was in one of the following five situations.
First, a corporation has to file a tax return if it had an establishment in the province at any time. Second, if the company in question was an insurance company that exercises one of the rights or powers of a corporation in Quebec, or that pursues a corporate purpose, owns any property or has an establishment in Quebec, it must also file a business income tax return.
Third, if the corporation has disposed of taxable Quebec property, even if it does not have an establishment in Quebec and did not reside in Canada, it must also comply with this obligation. Fourth and fifth, if the corporation was acting as an agent or nominee or was subject to a special tax, it must file a tax return.
Even if a corporation has no tax payable or has not generated any income during the reporting period, it is still obligated to provide any required documentation.
Deadlines for filing a corporate tax return
A corporation does not simply have to file a tax return. It must also ensure that it does so within the prescribed time limits. And what is the deadline for corporate income tax? The declaration must be made within six months of the end of the fiscal year. After that, if it has a balance to pay, the corporation must pay it two months after its fiscal year, with a few exceptions. This applies to both the provincial and federal levels.
What if your company went bankrupt during the year?
Just because a corporation goes bankrupt does not mean that it is not required to file a tax return. In fact, a corporation that goes bankrupt during a taxation year has to file two returns for the period in question. The first for the period beginning on the first day of the tax year and ending on the day before the bankruptcy date. The second for the period beginning on the date of bankruptcy and ending at the end of the tax year.
Filing a corporate income tax return in total confidence
Some things change, but others never will. To this end, corporations will likely still have to file an income tax return on an annual basis.
Are you operating a company and looking for a reliable and efficient partner who can establish a solid relationship of trust with you? You can count on our company to file your T2 corporate tax return. Contact T2inc today.
Frédéric Roy-Gobeil
CPA, M. TAX
As President of T2inc.ca and an entrepreneur at heart, I have founded many start-ups such as delve Labs and T2inc.ca. A former tax specialist at Ernst & Young, I am also a member of the Ordre des comptables professionnels agréés CPA and have a master's degree in taxation from the Université de Sherbrooke. With a passion for the world of entrepreneurship and the growth mindset, I have authored numerous articles and videos on the industry and the business world, as well as on accounting, taxation, financial statements and financial independence.
