Which Tax Returns Does a Canadian Business File?

Does my business go on my personal tax return?

A sole proprietorship goes on the owner's personal T1. A partnership's income or loss goes on each partner's return. A corporation files its own T2; the shareholder's personal return reports amounts paid to that shareholder, such as salary or dividends, rather than the corporation's full profit. CRA explains the partnership and corporation split.

The structure determines the income tax return. A GST/HST account, payroll, dividends or contractor payments can create other filing duties for any structure.

What does a sole proprietor file?

A sole proprietor reports business or professional income and expenses on the personal T1, usually using Form T2125. The CRA also accepts other financial statements that provide the information. CRA: report business income and expenses.

No separate T2 or T5013 is filed merely because a sole proprietor has a business name or a business number. If the business had no sales but incurred business expenses, keep the records needed to report the result on the T1. If it had no business activity at all, the owner's T1 filing duty depends on the usual personal tax rules. CRA: who has to file a personal return. The GST/HST rule is separate: registration can require a nil return even when income tax reporting shows no sales.

Distinct sole proprietorship or professional activities go on the same T1, with a separate T2125 for each activity. CRA: completing T2125. Basic rental income generally uses T776; services to tenants can change the classification. See Rental income.

For how self-employed income is taxed, see How self-employed income is taxed.

What does a partnership file?

Partners report their shares of partnership income or loss on their own T1, T2 or T3 returns. An ordinary partnership does not pay income tax at the partnership level, but it may have to file a T5013 information return and give partners T5013 slips. A SIFT partnership must file a T5013 regardless of the size tests below and can owe tax at the partnership level; repurchases of listed equity can also require a separate T1156. CRA: partnership filing and SIFT rules.

Under the CRA's administrative policy for partnerships carrying on business in Canada or Canadian partnerships, a T5013 is required when any of these tests is met:

Add revenue and expenses; do not subtract expenses to test the first threshold. The asset test uses cost before depreciation. A small partnership with only individual partners may fall under the CRA's filing relief, but partners still report their shares, using the financial statements if there is no T5013 slip. CRA: T5013 filing tests and examples.

What does a corporation file?

A corporation resident in Canada normally files its own T2 for every tax year. The T2 is separate from the owner's T1 and covers the corporation's federal income tax and, for most provinces and territories, corporate income tax as well. CRA: who files a T2; CRA: provincial corporate tax.

The corporate tax year follows the corporation's fiscal period, which may differ from the owner's calendar-year T1. A corporation based outside Canada may also have to file a T2 when it operates here. If it is a US business, see US business expanding into Canada. CRA: who files a T2.

For the schedules, financial information and filing method, see Filing your corporate return.

Does an inactive or no-income corporation still file a T2?

Yes. A resident corporation generally files a T2 for each tax year even if it was inactive, had no revenue or owes no income tax. The CRA expressly includes inactive corporations. The exceptions it lists are tax-exempt Crown corporations, Hutterite colonies and registered charities; another tax-exempt corporation may still have to file. CRA: resident corporations.

An inactive corporation can still have cash, expenses, losses or shareholder transactions to record. Gather its year-end statements and the date it stopped trading; closing a sales tax account or filing an annual registry return does not end its T2 duty. Legal dissolution ends that ongoing duty, but the corporation files a final T2 for the tax year ending on its dissolution date. CRA: final T2 on dissolution. A corporation with missed years should identify every unfiled fiscal period before preparing a current return.

Do I still file GST/HST returns if I had no sales?

Yes, if the business is registered for GST/HST. A registrant files for every assigned reporting period, even with no transactions, no income or no net tax. The CRA calls a return with nothing to report a nil return; a final return is also needed when the account closes. CRA: GST/HST reporting requirements.

The reporting period may be monthly, quarterly or annual. Check the period and due date for the GST/HST account rather than assuming the T1 or T2 deadline applies. In Quebec, Revenu Québec generally administers GST/HST and QST; the CRA handles both for selected listed financial institutions. Registrants file for each period even with no amount payable or refund. CRA: financial institutions; Revenu Quebec: returns.

For registration, see When to register for GST/HST. For the return and input tax credits, see Filing GST/HST and input tax credits.

Which slips does the business file for employees, contractors and dividends?

The slip follows what the business paid, not its legal structure. Salary, service fees and dividends can require different information returns, even when the business has no profit.

For ordinary service fees, the CRA currently does not assess penalties for failing to complete T4A box 048 unless its newer trucking policy applies. A trucking business paying a Canadian-controlled private corporation in the trucking industry more than $500 in a calendar year must report those fees; the penalty moratorium has ended for that case. CRA: T4A box 048 policy. Do not treat the general moratorium as an exemption from the reporting rule.

If the corporation paid no dividend or other reportable investment income, the CRA says not to file a blank T5. Salary paid to an owner may call for a T4; a taxable dividend may call for a T5. Record the payment date and legal character before selecting the slip. CRA: T5 guide. For payroll deductions and remittances, see Running payroll.

When is each return due?

The deadline depends on the return, the fiscal period and sometimes the type of partner. Filing and paying can have different due dates.

The annual GST/HST sole proprietor exception requires a December 31 year-end and business income for tax purposes. With no business income, the ordinary three-month deadline applies. A section 150 election is signed by an authorized representative of each electing corporation on GST27 or RC7227 and filed by the earliest GST/HST return due date for the period it takes effect. CRA: section 150 election. Check the account's assigned due date. A final T5013 is due by the earlier of 90 days after operations end or its normal due date; CRA payroll information returns are due within 30 days when the business stops. CRA: T5013 final return; CRA: information-return special situations. When a due date falls on a weekend or recognized holiday, CRA rules may move it to the next business day.

Provincial returns have their own deadlines. A Quebec self-employed individual's personal return is generally due June 15, with payment by April 30. Revenu Quebec: personal deadlines. Quebec TP-600 and RL-15 generally follow the partner-mix dates above, subject to special partnership rules. Revenu Quebec: partnership deadlines. Quebec CO-17 and Alberta AT1 are due within six months after the corporate tax year-end. Revenu Quebec: corporate deadline; Alberta: corporate deadline.

Does my province add its own returns?

Quebec and Alberta can add provincial income tax returns; provincial sales tax and Quebec slips can add more. For corporate income tax, the CRA administers the other provinces' and territories' tax through the T2. The location of a corporation's permanent establishment matters, not just where it incorporated. CRA: provincial corporate tax.

Some provinces impose separate sales taxes. For whether registration or returns apply, see Provincial sales tax. A corporate registry annual return is a separate legal filing; it does not replace an income tax return. Corporations Canada: annual return versus tax return.

Example

Illustrative Canadian dollars. A resident corporation has a December 31, 2026 year-end, no sales and C$1,000 of bank charges. It paid no salary or dividends and has an open GST/HST account with an annual reporting period. It files a T2 for the corporate year even though it had no revenue, and it files a GST/HST return for the reporting period even if that return reports no sales. It does not send a blank T5. If it has a Quebec establishment, it checks whether a CO-17 is also required; if it has an Alberta permanent establishment, it checks the AT1 filing exemption. The T2 is due June 30, 2027. Its annual GST/HST return is generally due March 31, 2027.

Different for you?

• You are deciding whether to incorporate: the return changes with the legal structure. See Sole proprietorship or corporation.
• This is your first corporate year, you changed the fiscal year-end, or you have missed T2 returns: gather incorporation documents, year-end dates and prior filings for tax preparation. The separate filing and payment dates make missed periods consequential.
• You need to prepare the T2: see Filing your corporate return.
• You have staff or pay an owner a salary: gather payroll account details and payment records. See Running payroll.
• You are unsure whether you needed a GST/HST account: see When to register for GST/HST.
• You own foreign property or a foreign company: see Foreign property and affiliate reporting.
• Your Canadian corporation sells to US customers: see Canadian corporation US tax return.
• You are a US citizen or resident who owns a Canadian corporation: separate US owner reporting may apply even without a salary or dividend. See American owners of Canadian corporations.
• You have a partnership with corporate or trust partners, more than one entity, or both Quebec and Alberta operations: gather each entity's business number and program accounts, partner list, year-end, sales tax registrations and payments to owners and contractors for tax preparation.