The due dates for Canadian Business tax returns as well as the amount of tax due, depends upon how your business is structured as well as your fiscal year end.
If your business is a sole proprietorship or a partnership your business return becomes part of your T1 personal tax return, and your business income is reported on form T2125. You and your spouse have until June 15th to file your taxes, but you must pay any amounts due by April 30th to avoid penalties.
If your business is a corporation you can choose any date for your fiscal year end but if the corporation has a balance owing it must be paid within two months after your fiscal year end. However Canadian-controlled private corporations are an exception to this rule in that they have three months to pay their income tax balance if they meet certain conditions.
Corporations must also pay taxes in the province or territory where the business resides in addition to their federal taxes. Corporate taxes are administered by the CRA except for in Quebec and Alberta.
If your business is incorporated, you need to file a T2 tax return every year whether or not your company owes any tax. Sole proprietors and partnerships that are active must file individual returns regardless of if they have any business income to report. The form 2125 must be completed as you may have incurred business expenses even if your business had no revenue, which means that you will have a business loss that can be written off against your other personal income. This can be particularly relevant for people who have just started a small business on the side but still have regular employment, as your business may not generate income in the first few years, but your expenses can be written off against your income up to a limit.
How the Pandemic has Affected Tax Return and Payment Deadlines
The government has announced a number of changes to the filing deadlines and payment deadlines for business taxpayers in 2020. For self-employed individuals and their spouses, the tax deadline remains at June 15th, but payments will not be due until September 1st.
There are also changes to the tax and payment deadlines for partnerships and corporations. The partnership filing deadline for those with a Dec 31st, 2019 year-end was extended to May 1st. The tax filing deadline for corporations has been extended to June 1, 2020 in some cases if the tax return would ordinarily be due between March 18 and June 1, it is now due June 1. Otherwise, the normal six-month filing deadline applies.
For Corporations payments of Part 1 tax that become due on or after March 18th will not be due until September 1st but there is no extension to Part lV which is a refundable tax on certain inter-corporate dividends received by Canadian private corporations and is due when the corporate return is filed.
GST/HST remittances have also been extended for payments due after March 18th. They will now be due on June 30th, this includes monthly payments for the February, March and April reporting periods, quarterly collections for January 1 to March 31, 2020 and annual filers whose return or instalments are due in March, April or May.
From articles by Susan Ward and BDO Canada
How the Pandemic is Affecting Canadian Businesses
Planning for the Future of Your Business
Which Goods and Services are GST Exempt or Zero Rated?
What are Input Tax Credits?
Is it Time for the Annual Clean-up and Back-up of your Files?
How to Stay Motivated When Working from Home
Working from Home – Why it can be Advantageous for Employers
Thinking About a Business Partnership in Canada?