T2 Corporate Tax Return Preparation and Filing
MaxPro Financials prepares and files T2 corporate tax returns for Canadian-controlled private corporations, holding companies and professional corporations across British Columbia, Alberta and the rest of Canada. Your year-end financial statements, the T2 and any provincial return are prepared together, by the same team that plans your salary, dividends and instalments.
- Year-end financial statements — prepared from your books, with the adjustments the CRA expects
- T2 preparation and e-filing — every schedule your corporation needs, including provincial schedules
- Alberta AT1 returns — filed separately with Alberta Tax and Revenue Administration where required
- Tax planning before year end — salary vs. dividends, instalments and the small business deduction
- CRA follow-up — we answer review letters and reassessments on returns we file
Every engagement starts with a free consultation and a fixed fee in writing.
What Is a T2 Corporate Tax Return and Who Must File?
The T2 is the annual income tax return that every corporation resident in Canada must file with the CRA for each tax year, even if it had no income, no activity and no tax to pay. The only exceptions are a few categories such as registered charities and tax-exempt Crown corporations. Non-resident corporations that carry on business in Canada or sell taxable Canadian property must file too.
A complete T2 includes the corporation’s financial statements in GIFI format, a reconciliation of accounting income to taxable income, capital cost allowance, shareholder information, and the provincial schedule that calculates BC or other provincial tax. Alberta corporations may also have to file a separate Alberta return, the AT1.
T1 vs T2: Personal vs Corporate Tax Returns
If you run a business, which return you file depends on whether the business is incorporated. A sole proprietor reports business income on their personal T1. A corporation is a separate taxpayer and files its own T2, and the owner files a T1 for the salary or dividends they take out.
| T1 personal return | T2 corporate return | |
|---|---|---|
| Who files | Individuals, including sole proprietors | Every corporation resident in Canada |
| Filing deadline | April 30, or June 15 if self-employed | Six months after the fiscal year end |
| Tax payment due | April 30 | Two or three months after the fiscal year end |
| Tax on business income | Personal rates, up to 53.5% in BC and 48% in Alberta | 11% on the first $500,000 of active business income for most small CCPCs in BC and Alberta |
| Business losses | Can offset your other income | Stay in the corporation: carried back 3 years or forward 20 |
Deciding whether to incorporate? Our business incorporation service walks through the numbers, and our T1 personal tax service covers the owner’s side.
Our Corporate Tax Services
T2 preparation and filing
We prepare the full return, check it against last year and against your GST and payroll filings for consistency, and e-file it once you sign the T183CORP authorization. You receive copies of everything filed.
Year-end financial statements
We prepare compilation-level financial statements from your books, the standard most private corporations need for the CRA and their bank. If your bookkeeping is behind, we bring it current first.
Corporate tax planning (salary vs. dividends)
Before your year end we look at how much profit to leave in the corporation, how to pay you, and whether bonuses should be accrued. For Alberta businesses, see how this works with our tax accountants in Calgary; in BC, see corporate tax returns in Vancouver.
T2 Filing Deadlines and Instalments
| Obligation | When it is due | Example: December 31 year end |
|---|---|---|
| T2 return | Six months after year end | June 30 |
| Balance owing: small CCPCs that qualify | Three months after year end | March 31 |
| Balance owing: other corporations | Two months after year end | February 28 |
| Instalments | Monthly, or quarterly for eligible small CCPCs, once tax is over $3,000 | Throughout the year |
| T5 slips for dividends paid | Last day of February | February 28 |
The payment date comes before the filing date, so a corporation that waits for its accountant in June has usually already missed it. Interest runs from the payment date.
Late filing penalties
Filing late costs 5% of the unpaid tax plus 1% for each full month the return is late, up to 12 months. If the CRA has already charged a late-filing penalty in any of the three previous years and sent a demand to file, the penalty doubles to 10% plus 2% a month, up to 20 months.
Corporate Tax Deductions Your Accountant Should Check
Most corporate tax savings come from getting a handful of items right every year:
Capital cost allowance (CCA)
Vehicles, equipment, computers and buildings are deducted over time through CCA classes. The class chosen, the timing of purchases and whether you claim the full amount in a given year all change the result.
Salaries, bonuses and benefits
Salaries and bonuses paid to you and your staff are deductible. A bonus can be accrued at year end and deducted that year, provided it is actually paid within 180 days after the year end.
Small business deduction
Canadian-controlled private corporations pay the low small business rate on up to $500,000 of active business income. That limit shrinks once passive investment income in the corporation passes $50,000 a year, or once taxable capital of associated corporations passes $10 million, so investing inside the company needs planning.
How Much Does T2 Preparation Cost?
The fee depends on how active the corporation is and how complete its books are when they reach us. The ranges below are typical for Canadian private corporations; your exact fee is confirmed in writing after a free consultation.
| Type of corporation | Typical fee (CAD) | What is involved |
|---|---|---|
| Inactive or nil-activity corporation | from ~$500 | Nil financial statements and a basic T2 |
| Holding company | from ~$1,200 | Investment income, dividends and shareholder loans |
| Active small business with current books | from ~$2,500 | Financial statements, full T2 schedules and tax planning |
| Books behind, or several related corporations | Quoted after review | Bookkeeping catch-up or multiple returns |
For a fuller picture of accounting fees, read how much an accountant costs in Canada.
How We Prepare Your T2, Step by Step
- Free consultation and fixed quote. We look at your corporation, your year end and the state of your books.
- Send your documents. Upload them securely or give us access to your bookkeeping file.
- Review and year-end adjustments. We reconcile the accounts, record adjustments such as amortisation and accruals, and flag anything that needs your input.
- Planning meeting. Before anything is final we go through the draft statements with you and settle salary, dividends and bonuses.
- Approve and file. You sign the T183CORP electronically and we e-file the T2 and any provincial return.
- After filing. We check the notice of assessment when it arrives and deal with any CRA questions.
Documents Checklist for Your T2
- Last year’s T2, financial statements and notice of assessment, if you are new to us
- Articles of incorporation and any changes to shareholders or directors during the year
- Bank, credit card and loan statements for the full year
- Your bookkeeping file, or sales invoices and expense receipts
- Details of assets bought or sold, and any new leases or financing
- Payroll summaries, PD7A statements and T4 or T5 slips issued
- GST/HST (and PST) returns filed during the year
- Inventory count at year end, if you carry stock
- Amounts you took out of or put into the company personally
T2 Corporate Tax: Frequently Asked Questions
Yes. Every corporation resident in Canada must file a T2 for each tax year, even with no income or activity. Missing returns can lead to penalties and, in some provinces, the corporation being struck from the registry.
You can, but the CRA does not offer free T2 software, so you would need to buy certified tax software and prepare the financial statements yourself. Most owners use an accountant because the return has to reconcile with the financial statements, the GST returns and payroll.
A T1 is the personal income tax return filed by individuals, including sole proprietors. A T2 is the corporate return filed by a corporation. If your business is incorporated, you file both: the T2 for the company and a T1 for the income you take out of it.
Six months after your fiscal year end. Any tax owing is due earlier, two or three months after year end depending on the corporation, so plan to pay before you file.
BC corporate tax is calculated on a schedule inside the federal T2, so there is only one return. Alberta collects its own corporate tax, so many Alberta corporations must also file an AT1 return with Alberta Tax and Revenue Administration.
Generally six years from the end of the tax year they relate to. Some records, such as the minute book, share register and records supporting asset costs, should be kept for the life of the corporation.
Yes. We regularly bring corporations up to date on several years of unfiled returns. Filing voluntarily before the CRA contacts you usually means lower penalties, and relief from penalties and interest can sometimes be requested.