When is the T2 corporate tax return due in Canada?

The T2 corporate income tax return is due 6 months after your corporation's fiscal year-end. For example, if your year-end is December 31, your T2 is due June 30. However, any balance owing is due within 3 months of year-end (or 2 months for most CCPCs). Filing and payment deadlines are separate.

What is the corporate tax rate in Canada for small businesses?

A CCPC that qualifies for the small business deduction pays a combined federal-provincial rate of roughly 9%–12.2% on the first $500,000 of active business income (varies by province). Income above the $500,000 threshold, or passive investment income, is taxed at higher rates.

What documents do I need to file a T2 corporate tax return?

You'll need your year-end financial statements (income statement and balance sheet), the prior year's T2 return, details of any asset purchases or disposals, shareholder loan account details, dividend records, and any CRA correspondence received during the year. If we handle your bookkeeping, we'll already have most of this.

Does my corporation need to file a T2 even if it had no income?

Yes. Every corporation resident in Canada must file a T2 return every year, even if it had no income, no activity, or operated at a loss. Failure to file results in late-filing penalties regardless of whether tax is owed.

Corporate tax · Canada

Corporate tax filing
and T2 returns.

Q: What is the small business deduction (SBD) in Canada?

The small business deduction reduces the federal corporate tax rate to 9% on the first $500,000 of active business income earned by a Canadian Controlled Private Corporation (CCPC). This is significantly lower than the general corporate rate of 15%. Most owner-operated small businesses qualify.

T2 corporate income tax returns prepared and filed for incorporated Canadian businesses. We claim the small business deduction where your corporation qualifies, reconcile the year-end numbers, and deal with the CRA on your behalf. Anywhere in Canada.

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What's included

What a T2 filing includes, start to finish

One flat scope of work. Year-end numbers in, e-filed return out, and the follow-up letters handled if the CRA sends any.

The T2 return itself

Full preparation with every schedule your corporation needs, including GIFI, Schedule 1, Schedule 50, Schedule 100 and the provincial equivalents.

Small business deduction

If your corporation qualifies as a CCPC, we claim the deduction on the first $500,000 of active business income. That drops the federal rate to 9%.

Capital cost allowance

Assets sorted into the right CCA classes and depreciation claimed at the level that actually helps you, this year and next.

Losses, forward and back

Had a loss year? Non-capital losses can be carried forward or carried back against prior profits for a refund. We work out which one is worth more.

Shareholder loan reconciliation

Shareholder loan accounts reviewed before filing. Left alone, they turn into personal income under Section 15 of the Income Tax Act, and people find out too late.

CRA correspondence

Review letters, audit queries and assessment notices tied to your corporate return. We answer them, so the letter stops being your problem.

Who we help

Who this is for

Most of our corporate clients are small. One or two owners, a handful of staff, sometimes none at all.

Owner-operated CCPCs

You own it and you run it. We claim the small business deduction and set the salary and dividend mix that costs you least overall.

Holding companies

Investment income, inter-company dividends, real estate. Filed with the passive income schedules done correctly.

Newly incorporated

Just incorporated? We open your corporate tax account, set the fiscal year-end, and file the first T2 so the later ones have a clean base.

Professional corporations

Consultants, IT contractors and creatives running income through a corporation to defer tax on earnings they don't need yet.

Multi-year catch-up

Behind on filings? We prepare the outstanding years together and ask the CRA for penalty relief where there's a case for it.

Bookkeeping plus tax

If we keep your books monthly, the year-end file is already reconciled when T2 season arrives. Nothing to reconstruct.

Corporate tax rates

What rate will your corporation pay?

It depends on two things: whether you qualify for the small business deduction, and which province you operate in.

CCPC active business income
(first $500K)

~12%

Federal 9% plus provincial, with the small business deduction applied. Ontario lands around 12.2%, Alberta and BC around 11%.

General corporate rate
(above $500K)

~26%

Federal 15% plus provincial. This is what applies to active income over the SBD limit, and to corporations that aren't CCPCs.

Passive investment income
(inside the corporation)

~50%

Interest, rent and non-eligible dividends earned inside a CCPC. Part of that tax comes back when the corporation pays a dividend out.

These are approximate combined federal and provincial rates. Yours will differ. We calculate the exact number when we prepare the return.

Common questions

Questions we get a lot

When is the T2 due in Canada?

The return is due 6 months after your fiscal year-end. For a December 31 year-end, that means June 30. The balance owing is due earlier, 3 months after year-end for most CCPCs, so March 31 for a December year-end. Filing late costs 5% of the balance plus 1% per month, and the penalty applies even on a nil return.

What is the small business deduction?

The SBD cuts the federal corporate rate from 15% to 9% on the first $500,000 of active business income earned by a Canadian Controlled Private Corporation. Add the provincial small business rate and most owner-operated CCPCs land between 9% and 12.2% on income under that threshold.

What is the corporate tax rate for small businesses?

A CCPC claiming the SBD pays roughly 9%–12.2% combined, federal plus provincial, on the first $500,000 of active business income. Ontario is 12.2%, Alberta is 11%, BC is 11%. Anything above $500,000 is taxed at the general rate, around 26%. We apply your province's exact rate when we file.

What documents do I need to file a T2?

Your year-end financial statements, meaning the income statement and balance sheet. Then last year's T2 and Notice of Assessment, any asset purchases or disposals, the shareholder loan account, dividend records, and any CRA letters from the year. If we do your bookkeeping we already hold most of it.

Does my corporation file a T2 with no income?

Yes. Every corporation resident in Canada files a T2 every year, whether it earned anything, sat idle, or lost money. A nil return is still a return. Miss it and the late-filing penalty applies even though no tax was owed. Dormant corporations keep filing until they're formally dissolved.

Corporate tax filingand T2 returns.