# Canada Corporate Tax Return (T2)

> Canadian corporations file a T2 return within six months of their tax year-end, and pay any balance within two months (three months for qualifying CCPCs claiming the small business deduction). CCPCs pay a 9% federal rate on the first C$500,000 of active business income, plus provincial tax; corporations controlled by non-residents generally pay the general rate.

Practice: Canada Business Services — https://www.industax.com/services/canada-business/

Foreign-owned Canadian corporations also face information reporting on transactions with non-arm's length non-residents and thin capitalisation rules on related-party debt.

We prepare T2 returns with partner Canadian accountants and align transfer pricing with India.

## Key facts

| Item | Detail |
| --- | --- |
| Filing | Within 6 months of year-end |
| Balance due | 2 months (3 for qualifying CCPCs) |
| Small business rate | 9% federal on first C$500,000 (CCPCs) |
| Foreign-controlled | General rate; extra reporting |

## Who needs this

- Canadian corporations
- Canadian subsidiaries of Indian companies
- Incorporated professionals

## What's included

- Tax computation
- T2 and provincial filings
- Instalment planning

## Documents

- Financial statements
- Shareholder details
- Related-party transactions

## Process

1. **Compute** — Taxable income and credits.
2. **Pay** — Balance by the due date.
3. **File** — T2 within 6 months.

Work that legally requires a Canadian accountant is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Does a Canadian subsidiary of an Indian company get the small business rate?

Generally no, because it is controlled by a non-resident and so isn't a CCPC.

### Are instalments required?

Corporations with tax payable above the threshold must pay monthly or quarterly instalments.

### What is the penalty for late T2 filing?

A percentage of unpaid tax plus monthly additions, higher for repeat late filers.

## Official sources

- Canada Revenue Agency: https://www.canada.ca/en/revenue-agency.html

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Canonical page: https://www.industax.com/services/canada-business/canada-t2-corporate-tax
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.