Find out if you have to file a corporation income tax return (T2)
Resident corporations
All resident corporations (except tax-exempt Crown corporations, Hutterite colonies and registered charities) have to file a T2 return for every tax year, even if there is no tax payable. This includes:
- non-profit organizations
- tax-exempt corporations
- inactive corporations
Non-resident corporations
A non-resident corporation must file a return if, at any time in the year, one of the following situations applies:
- it carried on business in Canada
- it had a taxable capital gain
- it disposed of taxable Canadian property
This requirement applies even if the corporation claims that any profits or gains realized are exempt from Canadian income tax due to the provisions of a tax treaty.
Note
A non‑resident corporation that had a taxable capital gain or disposed of taxable Canadian property, including a corporation that may have received a certificate of compliance from the CRA, has to file a return, unless the disposition meets all the following criteria:
- no tax is payable under Part I for the tax year
- the corporation is not liable to pay any amount under the Act for any previous tax year (other than an amount covered by adequate security under section 116 or 220)
- each taxable Canadian property disposed of in the tax year is one of the following:
- excluded property under section 116
- property for which a certificate was issued under section 116
Taxable Canadian property excludes shares of corporations, and certain other interests, that, during the 60-month period ending at the time of determination, do not derive their value mainly from real or immovable property situated in Canada (including Canadian resource property and timber resource property).
A non-resident corporation also has to file a T2 return in a number of situations, including:
- when it has filed Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty, to pay Part I tax on the net amount of timber royalty income or rental income from real property under subsection 216(4) for the current year and the CRA approved it
- when it has filed Form T1288, Application by a Non-Resident of Canada (Corporation) for a Reduction in the Amount of Non-Resident Tax Required to Be Withheld on Income Earned from Acting in a Film or Video Production, to pay Part I tax on the net amount of acting services under subsection 216.1(1) for the current year and the CRA approved it
Even if neither of these requirements applies, a non-resident corporation may still want to file a return if any of the following situations apply:
- when it wants to claim a refund
- when it wants to elect to pay Part I tax on the net amount of timber royalty income or rental income from real property under subsection 216(1) for the current year
- when it wants to elect to pay Part I tax on the net amount of acting services under subsection 216.1(1) for the current year
Note
Non-resident corporations must file their T2 return, schedules, and the General Index of Financial Information in Canadian funds only. They are not eligible to file in a functional currency per section 261.
If you have questions about non-resident returns, go to Businesses – International and non-resident taxes.
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