BATT#13: I Started a New Small Corporation – When Do I Have To Pay Taxes?

One of the first questions we get when a newly incorporated business comes to us is when to pay taxes?  This is of course important, as forgetting your taxes will cause penalties and/or interest that no one wants to add on to their tax bill.

So what’s the answer?  Well it depends on a few things.  The nice part about having a corporation is you get to pick your year end.  As long as it’s within 53 weeks of the date you incorporated, you are good to go.  So once you pick a year end, when do you have to pay?

Corporations always have to have their taxes filed by six months after their year end.  Unlike personal taxes, however, corporations have to pay their taxes before their filing deadline in Canada.  To add further complications, some corporations have to pay three months after their chosen year end, and others two months!  Add into that the requirement for installments and it can get quite tricky.

So how do you sort it out?  Most of the time, a Canadian Controlled Private Corporation that earns less than $500,000 of taxable income can wait three months to pay their balance, and bigger companies must pay within two.  That’s not always the case though, so consulting a CPA with good tax knowledge can be very helpful.

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