When Are Corporate Tax Installments Due in Canada?

August 24, 2021 | Written by: Sohail Afzal

Tax Installments Due in Canada

If you have a business, one of the most important things you worry about is corporate taxes. If you don’t pay on time, you could get into a world of trouble. But how do you pay your corporate taxes, and more importantly, when do you pay them? What is the requirement?

You are supposed to pay corporate taxes if your income tax returns are more than $3000. You can pay them every month or quarterly.

Generally, the corporations have to pay the taxes in installments to the Canada Revenue Agency (CRA). As mentioned previously, it is either paid monthly or quarterly. However, you should make sure that you do the tax installments before the due date to avoid the penalties by the CRA. You can either do it yourself or, better yet, hire an accounting firm in Canada to do it for you. This way, you can ensure that your corporate taxes are being filed and you don’t have to spend too much time on them.

Let’s find out more about the Corporate Tax installment Due Dates.

Corporate tax installment Due Dates 2021

By installment, we mean the periodic payments of incomes tax paid through the year to the CRA. Like the tax deducted from your monthly or bi-weekly paycheque, the businesses have to pay corporate tax regularly. You could have a small or a large company, but you are obliged to pay the tax. If you work with an accounting firm, you can easily handle corporate tax returns without putting yourself through a lot of stress and anxiety. They will handle it all for you, and you can focus on your business operations.

Quarterly Tax Installments 

When your business meets all the requirements to qualify as a small Canadian Private Corporation (CCPC) and fulfills CRA’s terms and conditions, you can choose to pay the quarterly installment payments.

Now you must be eager to know about the due dates, right? Well, the dates are decided based on the business’s fiscal year.

For instance, suppose the fiscal year of your business ends on 31st December. Now the quarterly taxes would be due by these dates below:

  • 31st March.
  • 30th June.
  • 30th September.
  • 31st December.

You have to ensure that you meet the requirements of the CRA if your small CCPC wants to pay quarterly tax installments. These Requirements include:

  • The compliance history has to be perfect.
  • The CCPC has claimed a small business deduction for the current or previous year.
  • The taxable income of the corporations has to be $500,000 or less than that, and the taxable capital has to be $10 million or less.

Monthly Tax Installments

When the corporation doesn’t fulfill the requirements of the quarterly tax installments, then you’d need to pay the monthly tax installments by the end of the month.

In case the corporation doesn’t qualify for the quarterly installments during a tax year. You can also proceed with paying the installment for the current year. After that, you can start paying the monthly installments.

However, there are few exceptions as well.

  • If the corporation is new, they don’t have to pay the tax in installments in the first year.
  • If the tax payable in total is $3000 or less than that, then you don’t have to pay the installments.

In both the cases above, you are required to pay the tax bill before the due date when it’s the end of the tax year.

Conclusion

Now you are familiar with the corporate tax installments due date in Canada. If your business qualifies for the quarterly tax payments, you can go for it, or else you have to pay it at the end of the month. On the other hand, new businesses are not required to pay the tax installments for the first year.

You can contact us for all the details regarding the corporate taxes.

Sohail Afzal CPA Toronto

Sohail Afzal, CPA, CMA, MBA

Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.

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