Filing Corporate Taxes in Canada

Filing Corporate Taxes in Canada is as same as filing taxes anywhere in the world. However, when it comes to corporate taxes things are a little different. Corporate taxes are different from personal taxes, regardless of the names the taxes have no correlation except the individual paying them. Corporate taxes are relevant to a separate legal identity – being the business, and any deductions or tax receipts are charged on the identity of the company rather than on the owner. In simpler terms, corporate taxes are different from personal taxes because:

  • Corporate taxes are charged on the company and/or business profits while personal taxes on an individual’s taxable income.
  • Corporate taxes have very different charging obligations in comparison to personal taxes.

Why are Corporate Taxes Important?

Corporate taxes relieve the owner of the burden of paying personal taxes as well as business related taxes from their own pocket. As the business and/or company has its own identity, it is taxed solely on that existence. Furthermore, they are advantageous also due to the fact that:

  • Corporate taxes deduce medical insurances for families.
  • It deducts retirement plans, fringe benefits etc.
  • It further allows the deduction of the entirety of losses from a company while an individual would have to provide information as to why they want to earn and why they suffered losses.
  • Lastly, the profit earned and taxed by a business, any remnants of it, stay in the business. This allows for better insight into future planning regarding the remnant profit in terms of future tax payments and/or investments.

How are corporate taxes filed and paid?

When filing corporate tax returns in Canada, individuals follow country and government body laws regarding this matter. Although, a few key concepts are followed everywhere regardless of cities and places:

  • Organization: By keeping bank statements, cash inflows and outflows alongside other expense statements in check and order, filing for tax returns is much easier as everything is present in one place. This removes extra hassle as well as eliminates the factor of possible misplacement of important documents.
  • Keeping Track of Important Paperwork: This relates to organization as keeping track of all invoices, payments, costs, expenses as well as documents from important agencies such as the Canadian Revenue Agency is of crucial importance as they directly coincide with corporate taxes and tax returns.
  • Punctuality: By making sure all payments are paid as soon as their due rather than delaying them makes for good reputation as well as it being a good business practice. It also relieves extra burdens and stress if deadlines start to close in.

Due dates

Slips: T4’s, T4A’s and T5 slips deadline is February 28, 2021

Non-resident slip: Deadline to submit NR4 slip is March 31, 2021

Trust return: The trust return is in one calendar year. You have to file the return and issue T3 and NR4 slips no later than 90 days after the trust tax year-end.

Partnership return: The partnership return and slips due on March 31, 2021.

Personal tax: The deadline to pay your taxes and file your return is April 30, 2021.

Self–employed: If you are self-employed, the deadline to file your taxes is June 15, 2021. All taxes owed must still be paid by April 30, 2021.

Corporate tax: Corporation tax return must be filed no later than six months after the year-end. For example, if corporation tax year-end is December 31, its filing deadline will then be June 30.

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