Impôts Ici
Online corporate tax: a return that reconciles with your books
An incorporated company generally has to file an income tax return even when no tax is payable. The return must reconcile the financial statements with taxable income, explain the adjustments and account for transactions involving shareholders, related corporations and the company’s tax accounts.
Impôts Ici prepares federal T2 and Quebec corporate returns from your accounting records, financial statements and year-end documents. We also review instalments, unusual expenses, dividends, shareholder balances and changes that occurred during the year. The service is delivered entirely at a distance, with follow-up when accounting information must be clarified before filing.
The corporate return is the last step in a process. If the books, shareholder transactions or decisions made during the year are unclear, those issues should be resolved before accounting income is converted into taxable income.
Your fiscal year deserves a complete and supportable file
Partnership or corporation: different filing obligations
Partnerships
A partnership is not taxed in the same manner as an ordinary corporation. Income or loss is generally calculated at the partnership level and allocated to the partners according to their rights and the applicable agreement. Depending on the structure and filing conditions, a T5013 partnership information return may be required.
Each partner then reports its share in its own return. The figures, fiscal period, shared expenses and slips must therefore be coordinated so that the treatment is consistent for all participants.
Incorporated companies
A corporation is a separate person from its shareholders. It owns its assets, incurs its liabilities and files its own returns. Salaries, dividends, benefits, loans and reimbursements paid to shareholders must be classified correctly because the same cash withdrawal can produce very different tax consequences depending on its nature.
When a decision goes beyond annual compliance — a new holding company, estate freeze, rollover, amalgamation or ownership change — a corporate and tax reorganization should be analyzed separately before it is recorded in the books.
Corporate tax
Corporate residence and activities outside Quebec
The place of incorporation matters, but it does not always settle the residence question. Central management and control, board decisions, the activities carried on and tax treaties may also affect the result. A corporation resident in Canada is generally taxed on worldwide income; a non-resident corporation may still have Canadian obligations when it carries on business in Canada or disposes of taxable Canadian property.
A foreign corporation operating in Canada may have to file a return even when a treaty limits the tax ultimately payable. Review our page on the T2 return for non-resident corporations when ownership, management or operations involve more than one country.
Clients satisfaits
Hours of experience
En économie d'impôt
From bookkeeping to the T2 return
1. Close the books and explain the balances
Preparation begins with bank reconciliations, accounts receivable and payable, sales taxes, payroll, capital assets and shareholder transactions. Unusual balances should be documented before the financial statements are finalized.
2. Prepare the financial statements
The balance sheet, income statement and related financial information provide the accounting foundation. The level of engagement — compilation, review or audit — depends on the needs of shareholders, lenders, investors or other users and should not be confused with the corporate tax filing itself.
3. Reconcile accounting income with taxable income
Some accounting expenses are not deductible, others are limited, and book depreciation is replaced by the tax rules for capital cost allowance. Losses, intercorporate dividends, investment income, credits and non-arm’s-length transactions may also change the calculation.
4. Meet both filing and payment deadlines
The T2 return is generally due within six months of year-end. The tax balance is usually due earlier — often two or three months after year-end depending on the circumstances — and instalments may be required throughout the year. We establish the calendar from the corporation’s actual year-end rather than waiting for the filing date.
Impôts Ici
Remote support for your corporation
Years of experience serving you
Corporate tax
Support throughout the corporate life cycle
The annual return may reveal a bookkeeping issue, a shareholder loan, a cash-flow concern or a structure that no longer matches the business. We separate what must be corrected for the current year from decisions that require forward-looking analysis.
For an upcoming decision, review tax planning or a corporate reorganization. When an information request or assessment has already been received, the pages on tax audits and compliance and tax representation help identify the appropriate response.
Contact Impôts Ici with the fiscal year involved, the corporation’s year-end, the accounting software used and the records currently available.