Corporate Tax Preparation
Corporate Tax Services in Canada
As a Canadian business owner, the biggest expense you incur throughout your entire life are Income Taxes. The key to properly manage them is to balance your income, expenses, and investments.
Given the dynamic nature of the tax landscape, it is best to allow a well-versed tax professional to manage your taxes whilst you get to spend more time to focus and expand your business operations. We at Toronto Tax Boutique work closely with clients and remain accessible and responsive to help them to achieve their most important business goals.
We provide a full range of integrated services, including preparing corporate income tax returns for corporations, corporate tax planning, income tax filing and others. We also identify opportunities that help minimize long term tax burdens, review the effectiveness of business structures, and advise on tax implications of transactions, and help optimize your tax deferrals. Choosing us for your corporate accounting services and planning also implies that we can act as intermediaries for any disputes with CRA.
The tricky thing about taxes is that an optimum tax structure varies as per the nature and transactions of a particular business and a one-size-fits-all strategy should never be applied. As part of this service, we will assist you in choosing the most tax-effective business structure by fully utilising all available tax breaks and possibilities.
It is our job to make sure that you achieve the best capital or revenue tax treatment as well as reducing your tax on disposals and maximising relief on acquisitions. Further, our in-house team is well versed with tax opportunities specific to certain industries and can help you tackle these aspects.
Who is required to file a corporate tax return?
Even if there is no tax due, all corporations, even non-profits and dormant entities must file an annual tax return. Not doing income tax filing is a criminal offence.
Further, a T2 return is required to be filed even by a non-resident corporation if, at any time in the year, it carried on business in Canada, it had a taxable capital gain, or, in some cases, it disposed of taxable Canadian property. Income Tax Act (ITA) provides definitions of few of these terms.
When to file your corporation income tax return?
A corporate income tax return must be filed within six months of the end of each tax year i.e., its fiscal period. To be precise, when the corporation’s tax year ends on the last day of a month, the return must be filed by the last day of the sixth month after the end of the tax year. In case the last day of the tax year is not the last day of a month, the return must be filed by the same day of the sixth month after the end of the tax year.
- If your tax year ends March 31, your filing due date is September 30.
- If your tax year ends August 31, your filing due date is February 28.
- If your tax year ends September 23, your filing due date is March 23.
Are you a new business owner and filing corporate taxes for the first time?
After you have incorporated your business, you should realize that although that decision (of getting your business incorporated) does not really impact the daily business operations, it impacts the corporate tax preparation process significantly.
You must strategically choose a fiscal year end for your business. According to CRA, the first tax year can be of any length, not exceeding 53 weeks. At this stage, you also need to understand that you are now required to file two Income Tax Returns: the Personal – T1, and the Corporate -T2.
Further, you should also consider the following points for your business:
- get an HST No. registered,
- use your business account wisely,
- plan for salary or dividends in advance, among others
When to pay the Corporate Income Tax owing?
Our services under Business/Corporate Taxes
Expert Business Tax Accountant at Toronto Tax Boutique operate seamlessly to provide businesses with effective tax management. Our Business/Corporate tax planning services include:
- Corporate Tax Returns
- Financial Statements
- GST/HST Returns
- Tax Minimization Strategies
- Tax Deferral Strategies
- CRA Audit Consulting
- Compensation and Payment Structures
Compensation strategies can help you build an effective and competitive organization. Our professional business tax accountants will help you mitigate risk and maximize your after-tax revenue. We’ll advise on optimal management salaries and shareholder dividends to protect the growth of your business.
Major legislative changes | Corporate Taxes
2010 Federal budget changes
Before the 2010 federal budget, Canadian taxable property generally included items like:
- Canadian real estate
- Shares of private corporations in Canada
- Property used to carry on business in Canada, among others
What changed after the 2010 federal budget?
Shares of private corporations and some trusts that derive less than 50% of their value from real estate, Canadian resource property, or forest resource property were excluded from the definition after the 2010 Federal Budget was announced. This modification was aimed to promote international investments in Canada. As a result, treaty relief is no longer necessary, and non-resident owners of such assets are no longer subject to Canadian tax on any capital gains realised from the sale of those properties. Non-resident vendors no longer need to obtain clearance certificates from the CRA or file Canadian income tax returns.