Corporate tax filing in Canada comes with more documentation and disclosure requirements considering the scale of operations they engage in. Corporations in Canada are required to ensure their taxation compliances in T2 returns. Here’s a detailed understanding of corporate tax return filing in Canada.
T2 Corporate Tax Return
As stated earlier, corporations operating in Canada are required to file T2 tax returns with the Canada Revenue Agency (CRA). As per the taxation laws, all the corporates are required to furnish their tax returns in T2 form, including the following corporates:
- Idle corporations with no activity
- Corporations exempt from tax
- Corporations are not required to pay tax
- Corporations operating as non-profit organizations
Apart from the resident corporations, the non-resident corporations are also required to file T2 returns in Canada if they have taxable capital gains income or carry any business in Canada or have disposed of taxable property in Canada.
Types of T2 Returns
Following are the 2 types of T2 corporate tax returns:
- T2 Corporation Income Tax Return: This is the normal T2 return that can be filed by any corporation in Canada.
- T2 Short Return: This is the shorter form of the T2 return that only eligible corporations can file.
Important Components of T2 Tax Return
Following are the important components of T2 tax return for corporations in Canada:
- T2 Form: This includes reporting of income as well as tax payable or refundable for the concerned tax year
- Schedule 1: This includes the bifurcation of the total revenue into different sources like capital gains, losses, investment, etc.
- Schedule 8: Here, corporations need to provide the income statement, balance sheet, and other financial data
- Schedule 9: All the related party transactions, transfer pricing etc. are disclosed in this schedule.
Other relevant schedules include the following:
- Schedule 6: Summary of the disposition of capital property
- Schedule 12: Resource-related deductions
- Schedule 13: Continuity of reserves
- Schedule 16: Patronage dividend deductions
- Schedule 17: Credit union deductions
- Schedule 73: Income inclusion summary for such corporations who are members of partnerships
How to Ensure Accurate Filing?
From the above, it is pretty clear that the t2 tax return filing requires consideration of various documents and information. Maintaining the accuracy of information is paramount to avoid any legal turmoil. Account Tax Pros is a pioneering platform that allows you to obtain expert services for timely and accurate taxation filings at some of the most competitive rates. Its bouquet of services spans the following:
- GST HST Consultancy
- Corporate Tax Return Filing
- T1 Personal Income Tax Return
- Accounting and Bookkeeping services
- Payroll Management
- Incorporation of Business
If you are also facing any issues relating to your business, accounting or compliance management, get in touch with Account Tax Pros now!
