For most businesses in Canada, the corporate tax year is the calendar year. It means that your tax return must be filed by April 30th of the following year.
However, if you are a new business or your business has changed ownership during the year, your tax return may be due on a different date.
This blog post will explore the corporate tax due dates in Canada and related information.
Federal corporate tax
The federal corporate tax is imposed on corporations resident in Canada. The tax is levied on the corporation’s taxable income for the year. The tax rate for Canadian-controlled private corporations (CCPCs) is 15% on the first $500,000 active business income and 26% on the remainder. For other corporations, the tax rate is 28%.
There are several tax incentives for businesses operating in Canada, including deductions for capital expenditures and research and development expenses.
The due date for filing a federal corporate tax return is June 15th for CCPCs, and March 31st for all other corporations. Taxes owing are payable within 2 months of the end of the fiscal year.
Provincial and territorial corporate tax
Provincial and territorial corporate tax is due two months after the end of the fiscal-year. For instance, if your fiscal year ends on December 31, your corporate tax is due on February 28.
If you file your corporate taxes late, you may be subject to interest and penalties. The interest and penalties you owe depends on the province where your business is located.
To avoid paying interest and penalties, file your provincial or territorial corporate tax return on time.
If your business is incorporated in Canada, you must make instalments for your corporate taxes. Payments in instalments are due on the last day of each full month during your tax year or on the last day of each complete quarter if you qualify as a small Canadian-controlled private corporation and pay your taxes in instalments.
The first payment is due either one month or one quarter and one day after the beginning of your tax year, whichever comes first. The remaining payments are all due on the same day of the month or quarter that follows, depending on which comes first.
For instance, the due dates for these payments are as follows:
- March 15
- June 15
- September 15
- December 15
If any of these dates are a weekend or holiday, the tax payable is due on the next business-day.
What is the current interest rate for overdue payments?
If you are a corporation in Canada, you must pay your taxes by the end of the month of your fiscal year. For example, if your fiscal-year ends on December 31st, you must file your corporate tax return and pay any taxes owing by January 31st.
You’ll be charged interest on the outstanding amount if you do not pay your corporate taxes on time. The current interest rate for overdue payments is 5% per year.
Filing your corporate tax return
It is that time of year again! You need to know corporate tax due date for filing your returns. Corporate tax season is upon us, and, as a business owner, it’s important to be aware of the deadlines associated with filing your corporate tax return.
In Canada, the due date for corporate taxes is June 15th. However, if your corporation’s fiscal year-end is December 31st, you have until March 31st to file your return. If you are self-employed, your tax return is due on April 30th.
Penalties for late filing
If you file your corporate taxes late, you may be subject to a late-filing penalty. The Canada Revenue Agency (CRA) will charge a penalty of 5% of the unpaid tax plus 1% of the unpaid tax for each full month, up to a maximum of 12 months. Interest will also accrue on unpaid amounts at 2% per month.
Knowing the corporate tax due dates is important if you are a Canadian business owner. While the filing deadline is usually March 31st, there are a few exceptions depending on the province in which your business is located.
Make sure to check with your local government to find your area’s specific deadlines. Failing to file by the deadline can result in late fees and penalties, so staying on top of this essential task is important.