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. Get started 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.