What happens if I file my corporate tax return late?
A late T2 with tax owing costs 5% of the balance plus 1% per month up to twelve months — doubled for repeat offenders — plus daily interest.
Every corporation must file a T2 each year, even with no activity. File late with a balance owing and CRA charges 5% of the unpaid tax plus 1% for each full month late, up to twelve months. If CRA demanded a return and you were also late in one of the three previous years, the penalty doubles to 10% plus 2% per month up to twenty months.
The deadline trap
Two different dates matter: your T2 is due six months after year-end, but the tax itself is generally due two or three months after year-end. Owners who wait for the filing deadline to think about the bill are already accruing interest.
Nil returns still count
No income means no penalty base — but an unfiled T2 keeps your corporation non-compliant, can hold up refunds and credits, and looks bad exactly when you need CRA cooperation or bank financing.
This is general information, not tax advice for your situation. Book a call and a Canadian accountant will give you the answer for your business.
Common questions
My corporation didn't make money this year. Do I still file?
Yes. Every corporation files a T2 annually, even a nil return. With no tax owing there is no late-filing penalty, but staying compliant protects refunds, credits, and your standing.
When is my corporation's tax actually due?
Generally two or three months after your fiscal year-end depending on your situation — earlier than the six-month filing deadline. Your accountant should have the payment scheduled before the return is even filed.