Do I have to pay corporate taxes and how?
Inked by Blinc
May 6, 2024Simple, just like you pay personal taxes on employment income, you need to file and pay tax on your corporation’s income. Since corporations are their own legal entity, think of it like a completely separate person from you, they need their own tax return completed. This is typically a lot more complex than a personal tax return or even a GST/HST return, so ensuring it’s done correctly and on time is very important.
Yes, all corporations, even if you make zero sales or a billion dollars in sales, must file a corporate tax return.
You only pay taxes on profits you made during the year and if you broke even or made a loss, you do not need to pay corporate taxes. Small businesses who typically make under $500,000 of taxable income/profits, have a tax rate of 12.5% (as of Jan 2024). The most updated figures can be found here.
Corporate tax returns are filed annually and they are due within 6 months of your corporation’s year end. For example, if your year end is December 31, 2024, then your return is due June 30, 2025.
With Blinc’s Compliance plans, corporate tax filings are done on a timely basis and accurately by our professional CPAs and updated automatically on your dashboard. If you choose to file it yourself, be sure to submit your return details on your Blinc dashboard so we may track your compliance accordingly!
All payments go directly through the Canada Revenue Agency via the My Payment page here. You may access the link through the Blinc dashboard as well. Be sure to save your receipt of payment and upload it on your Blinc minute book for future reference!
Pro Tip: For sales made during the year, a good rule of thumb is to keep 5-10% of it in a separate bank account. It’s quite common for founders to spend their money without considering whether they may owe corporate tax at the end of the year. It’s good practice to have a safe balance, just in case!
Getting a Blinc CPA to professionally review and complete your corporate tax return on time and accurately can ensure you don’t incur penalties, interest and claim all you can to save on corporate taxes payable.
