When are corporate taxes due to be paid to Canada Revenue Agency (CRA)?
The corporate taxes due date is different than the corporate taxes filing deadline. The T2 corporate tax return deadline to file is six months from the end of the fiscal year (see FAQ #220).
Corporate taxes due deadline is generally two months after the end of the fiscal year. However, the deadline is extended to 3 months if certain conditions are met:
- The corporation is a Canadian-Controlled Private Corporation (CCPC) during the whole year;
- The corporation claimed the small business deduction for the current or previous tax year; and
- In the previous tax year the taxable income of the corporation and any associated corporations does not exceed the group’s total business limit for that year.
If corporate taxes are not paid by the corporate taxes due deadline, then CRA will charge you interest until the full balance is paid. As the corporate tax filing deadline is six months after fiscal year end, you may have to estimate the corporate taxes beforehand and make a tax payment if you wish to avoid payment of interest.
Furthermore, if the corporation had taxable income in the previous tax year, it may be required to pay tax instalments for the current tax year. Your accountant can estimate and prepare an instalments schedule for the current year once the previous tax return has been prepared. The tax instalments are based on taxable income from the previous year. You can make lower tax instalments if you end up with lower taxable income for the current year. Please note that if the required instalments are not paid on time, then CRA will charge you interest. If you have overpaid your corporate taxes, then CRA will give you an option to refund the difference or you can transfer the balance to the next fiscal year.
We generally prefer to file the corporate tax return for our clients within two to three months of the fiscal year end. We encourage our clients to keep their books up to date. We also help with corporate tax planning.
For more information on corporate tax planning and the corporate taxes due deadline, please contact us for our help on this issue.