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CRA Deadlines Every Canadian Corporation Needs to Know

Missing a CRA deadline costs money. Here is a clear breakdown of the key filing and payment dates for Canadian corporations, so nothing slips through the cracks.

Published by Scott Sutherland5 min read

Image source: Unsplash

The core deadlines every corporation must track

For Canadian corporations, there are three fundamental deadlines to understand: the corporate tax payment deadline, the T2 filing deadline, and the GST/HST filing deadline. Missing any of these will result in penalties or interest charges from the CRA. The corporate tax balance-due date is generally two months after your fiscal year end. For eligible Canadian-controlled private corporations that claimed the small business deduction, it is three months after fiscal year end. The T2 return is due six months after fiscal year end. These two deadlines are separate - you can owe taxes on April 30 but not be required to file the return until June 30 if your fiscal year is December 31.

Instalments are a reality for most profitable corporations. If your net tax owing in any two of the three most recent years was more than $3,000, you are required to make quarterly instalment payments. CRA offers three instalment calculation methods: using the current year estimate, using the prior year's taxes, or using an average of the prior two years. Most corporations choose the prior year or averaging method to avoid underpayment penalties. Instalments are due on the last day of each quarter, or monthly if your company is on a monthly payment schedule. Missing an instalment does not trigger a penalty unless the total instalments paid are less than required.

For payroll, if your corporation employs people, you have remittance deadlines for source deductions including income tax, CPP, and EI. The frequency of payroll remittances depends on your average monthly withholding amount. Threshold 1 remitters, which includes most small businesses, remit monthly by the 15th of the following month. Accelerated remitters with higher withholding amounts remit more frequently. A payroll remittance that is even one day late results in penalties, and those penalties escalate quickly for repeat offences. Setting up automatic reminders or using payroll software that handles this automatically is strongly recommended.

  • Corporate tax balance is due two months after fiscal year end (three months for eligible CCPCs).
  • T2 corporate return is due six months after fiscal year end.
  • Quarterly instalments are required if net tax owing exceeded $3,000 in two of the last three years.
  • Payroll remittances are due monthly by the 15th for most small businesses - one day late triggers a penalty.

GST/HST deadlines and how they work with your filing period

GST/HST deadlines depend on your assigned filing period. Annual filers must file and pay within three months of their fiscal year end. Quarterly filers must file and pay within one month of the end of each quarter. Monthly filers must file and pay within one month of the end of each reporting period. If your GST/HST fiscal year matches your corporate fiscal year, you can align your HST and T2 filings, which simplifies your planning. If they are different, you need to track two sets of year-end deadlines simultaneously.

Annual filers should be aware that even though the filing deadline is three months after fiscal year end, any GST/HST installment obligations still apply during the year. If your previous fiscal year's net tax was more than $3,000 for quarterly remitters or more than $1,500 for annual remitters, you are required to make interim GST/HST instalments. These quarterly instalments are due quarterly throughout the year, even if you do not file quarterly. Many annual filers are unaware of this requirement and are surprised to receive a notice of interest from the CRA after filing a correct annual return.

A common planning point: if your corporation is consistently receiving GST/HST refunds because you purchase more taxable inputs than you collect from clients - a situation common in early-stage businesses and capital-intensive companies - switching to monthly filing accelerates your refund. An annual filer waiting three months after year end to file and then waiting again for processing could be holding a significant refund for nearly four months. Monthly filers can receive refunds within a few weeks of filing, improving cash flow considerably. If the business is also paying instalments during the year on income tax while simultaneously holding a recoverable HST balance, the combined cash drag can be significant for a growing company. Working with your bookkeeper to track both amounts throughout the year gives you a complete picture of your real cash position and helps you make better decisions about timing of expenses and equipment purchases.

  • Annual HST filers: file and pay within three months of fiscal year end.
  • Quarterly HST filers: file and pay within one month of each quarter end.
  • Annual filers may still owe quarterly HST instalments throughout the year if prior year net tax exceeded $1,500.
  • Monthly filing is worth considering if you regularly receive HST refunds - faster refunds improve cash flow.

What to do when you miss a deadline

If you have missed a CRA deadline, the most important thing to do is act immediately. File the return as soon as possible, even if you cannot pay the balance owing at the same time. The late-filing penalty for a T2 is 5 percent of the taxes unpaid at the due date, plus 1 percent for each complete month the return is late, up to 12 months. That is a maximum of 17 percent of the unpaid taxes in penalties alone, before interest is applied. Filing late but paying what you can dramatically reduces the amount subject to penalties. The CRA calculates the penalty on the unpaid balance at the filing due date, not on the full tax bill.

The CRA offers a Voluntary Disclosures Program for situations where a corporation has unfiled returns or inaccurate filings going back multiple years. Under the VDP, if you come forward before the CRA contacts you, you may be eligible to have penalties waived and to pay only the interest on the unpaid taxes, rather than facing the full penalty and potential prosecution. The VDP has specific eligibility criteria and the application process is not simple, but for businesses with several years of unfiled returns, it can result in substantial savings. An experienced tax professional can advise whether the VDP is appropriate for your situation.

Interest on overdue corporate taxes is calculated at the CRA's prescribed interest rate plus two percent for corporate tax debts, compounded daily. The prescribed rate is set quarterly and changes with interest rate conditions. In recent years, the CRA's rate has increased significantly. At current rates, leaving a corporate tax debt unpaid for a year can cost more in interest than the penalties themselves. If you cannot pay in full, contacting the CRA to arrange a payment agreement is preferable to doing nothing. The CRA does work with businesses that communicate proactively, and interest can sometimes be waived under the taxpayer relief provisions for demonstrable financial hardship. Taxpayer relief requests must be made in writing with supporting documentation, and they are evaluated on a case-by-case basis. Circumstances such as a serious illness, a natural disaster, or a postal disruption are examples that have historically supported relief requests. Financial hardship alone is not automatically sufficient, but when it is documented and the underlying tax debt is fully addressed through a payment arrangement, the CRA can and does waive interest in appropriate cases.

  • File a late return as soon as possible even if you cannot pay - the penalty is calculated on the unpaid balance, not the full bill.
  • The Voluntary Disclosures Program may waive penalties for multiple years of unfiled returns if you apply before the CRA contacts you.
  • CRA interest on overdue taxes is compounded daily and can exceed the penalties in a high-rate environment.
  • Contact the CRA proactively to arrange a payment plan rather than ignoring overdue amounts.

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