December 16, 2025

How to File Corporate Income Tax in Canada – An Easy-to-Follow Guide

Corporate Income Tax in Canada

Tax filing may seem like a tedious process, but when you have the backing of an expert, the process becomes easy and hassle-free. If you run an incorporated business in Canada, tax filing is a legal requirement, regardless of whether you have earned any income. Tax filing is not just about complying with CRA regulations; it also helps optimize deductions and credits and aids in financial planning.

As a Toronto-based corporation, it is more than your annual obligation to file your income tax; it is a responsibility that helps in your business’s growth and expansion. Follow these steps for tax filing to make the process easy.

Know Your Tax Filing Requirements

T2 Corporate Income Tax Return: Corporations in Canada need to file a T2 income tax return every year, even if no taxes are payable.
Deadline: The T2 return must be filed within six months of the end of the corporation’s fiscal year.
Payment Due: Any balance owing is typically due two or three months after year-end, depending on eligibility for the Small Business Deduction.

Gather All The Required Information

Before tax filing, make sure that all your documents are ready –

  • Income statements and balance sheets
  • General ledger, bank statements, and receipts
  • Payroll records (salaries, CPP/EI contributions)
  • Records of capital assets for Capital Cost Allowance (CCA)
  • Supporting documents for deductions and credits (e.g., SR&ED, GST/HST filings)

If you have any confusion about the documents, get in touch with your tax accountant. He/ she will help you through the entire tax filing process.

Streamline Your T2

☎️ Get Help!

Complete The T2 Return

Depending upon your corporation’s activities, there are several T2 return schedules. The main schedules include the following –

  • Schedule 1: Net income for tax purposes (reconciliation of accounting income with taxable income)
  • Schedule 50: Shareholder information
  • Schedule 125 & 141: Financial statements
  • Schedule 7: Aggregate investment income and refundable taxes
  • Schedule 8: Capital Cost Allowance (CCA)
  • Schedule 31: Investment tax credits

Corporations claiming the Small Business Deduction (Schedule 23) or Scientific Research and Experimental Development (SR&ED) credits (Schedule 31) must include additional forms. You can ask your tax accountant for more information on the same.

File Electronically

If your corporation has a gross revenue over $1 million, then your tax filing should be done electronically using Internet Filing (EFILE) or any approved tax software.
Smaller corporations can also file electronically, as this helps with quick assessment and easy record-keeping.
Tax filing can also be done via CRA’s My Business Account portal.
Your tax accountant or accounting firm professional can help guide you through the process.

Pay Any Balance Owing

Follow the payment deadline

  • Two months after the fiscal year-end (most corporations)
  • Three months for eligible Canadian-controlled private corporations (CCPCs) under the small business limit.

Payment methods
CRA My Payment service, online banking, pre-authorized debit, or through financial institutions.

Stay Compliant With Instalments

Corporations owing more than $3000 in annual taxes must pay corporate tax instalments. These can be monthly or quarterly. A lot of businesses tend to overlook tax instalments, but they are an integral part of risk-free tax filing. Keep in mind that these instalments count towards the final balance due when the T2 income tax is filed.

Maintain Records For Six Years

CRA asks corporations to keep their financial records, receipts, and supporting documents for at least 6 years from the end of the last tax year. Keeping your documents organized is important in case of a CRA audit or review.
Get in touch with your tax accountant to know tips and tricks for proper documentation and the list of important documents.

Avoid These Common Mistakes

  • Missing the payment deadline (interest begins accruing immediately)
  • Incorrectly classifying expenses, leading to disallowed deductions
  • Overlooking credits such as SR&ED or the Small Business Deduction
  • Late tax filing can trigger penalties even if no tax is owed

Tax filing in Canada requires a lot of detail, accuracy, and strategic planning. Each stage is important. Right from gathering all the important documents to completing the T2 return tax filing, the process can be time-consuming and daunting; that’s why it is recommended that you rely on the expertise of professionals.

With Taxccount Canada, you get comprehensive tax filing services. Our tax accounting professionals will simplify the tax filing process for you, ensuring compliance with CRA regulations and finding opportunities to minimize tax liability.

Ensure CRA Compliance

☎️ Consult Now

This is general information only and not professional advice. Consult a professional before acting.