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Corporate taxes are taxes that Canadian businesses pay on their profits. In Canada, corporate taxes are a part of doing business. It is important for corporations of all sizes to stay on top of their corporate tax obligations.
In most cases, corporations in Canada are required to file their T2 corporate tax returns within 6 months after the end of their fiscal year.
For businesses with a fiscal year ending on December 31, 2023, the corporate tax deadline for 2024 will fall on June 30, 2024. However, if a business has a different fiscal year-end, they need to adjust their Canada tax deadline accordingly.
Missing the corporation tax deadline can lead to several negative imptact for corporations, including:
CRA imposes penalties for late filing. These penalties can be substantial and can quickly add up over time.
The penalty is calculated based on a percentage of the balance owe in taxes to CRA. For each month that you’re late, you’ll have to pay 1% of the balance you owe, plus an extra 5% as a starting penalty. This keeps going for up to 12 months if you’re really late.
So, if you owe $20,000 in taxes and you file your taxes 6 months late, you might have to pay an extra $1600 as a penalty.
In addition to penalties, the CRA may charge interest on any unpaid taxes. These interest charges can significantly increase your overall tax bill.
Missing the deadline can also result in the loss of certain tax benefits, credits, and deductions that your business may be entitled to.
Consistently missing tax deadlines can damage business’s reputation and credibility in the eyes of the CRA and potential investors.
Corporate taxes can be complex, especially for businesses with intricate financial situations. Consider enlisting the assistance of a qualified corporate tax accountant to help businesses with preparing and filing their corporate tax return.
They can ensure accuracy and compliance with tax laws, giving business owner a peace of mind.
