To prepare a T2 corporate income tax return in Canada, you need to gather all the necessary documents such as financial statements, receipts, invoices, and other supporting documents. The documents required vary depending on the corporation, but the following are a good place to start the gathering process:
- Company name, registered address, and Business Number
- Names and addresses of all shareholders
- Whether shareholders hold shares in other companies or if the company is bound or associated with other companies
- Financial statements (income statement, balance sheet, cash flow statement)
- General ledger
- Bank statements
- Accounts receivable and payable
- Payroll records
- Capital asset additions and disposals
- Tax returns from previous years
Once you have gathered all the necessary documents, you need to determine your tax filing obligations and income tax status in Canada. All resident corporations (except tax-exempt Crown corporations, Hutterite colonies, and registered charities) have to file a corporation income tax (T2) return every tax year even if there is no tax payable. Non-resident corporations have to file a T2 return in certain situations. You can file your taxes online or by paper, or find other options such as having someone else complete them for you. Most corporations can file their return electronically using the Internet. You can obtain a T2 Corporation Income Tax Return form from the Canada Revenue Agency (CRA) website or by calling the CRA at 1-800-959-5525. You can also use tax preparation software like TurboTax to file your corporate taxes online. If you owe income tax, you must pay it by the deadline for the previous tax year. If you cannot file electronically, you can print the T2 Bar Code Return and mail it to the CRA. Do not send the T2 bar code by fax. The CRA does not accept it. If you file through an electronic transmitter, you have to authorize the transmitter by completing Form T183 CORP, Information Return for Corporations Filing Electronically, for each tax year. It is important to keep all receipts and documents for at least six years after you file your return as the CRA may request a review. If you make a mistake on your corporate tax return, you can correct it by filing an adjustment request with the CRA. You can do this online using the CRA’s My Business Account service or by mail. It is important to correct any mistakes as soon as possible to avoid penalties and interest charges. The federal corporate tax rate in Canada is 15%. However, the combined federal and provincial tax rates vary by province and territory. You can find the current tax rates on the CRA website.
If you need help with your T2 please contact us today at info@bomcas.ca or 780-6675250
