The balance-due day is the date by which you have to pay the remainder of the tax you owe for the tax year. See paragraph 157(1)(b) of the Income Tax Act.
Generally, all corporation taxes (except Part III and Part XII.6) charged under the Income Tax Act are due two months after the end of the tax year.
However, for Parts I, VI, VI.1, and XIII.1 tax, the balance of tax is due three months after the end of the tax year if conditions 1 and 2 that follow are met, as well as condition 3 or 4:
- the corporation is a Canadian-controlled private corporation (CCPC) throughout the tax year;
- the corporation claimed the small business deduction for the current or previous tax year;
- the corporation's taxable income for the previous tax year does not exceed its business limit for that tax year (if the corporation is not associated with any other corporation during the tax year);
- the total of the taxable incomes of all the associated corporations for their last tax year ending in the previous calendar year does not exceed the total of their business limits for those tax years (if the corporation is associated with any other corporation during the tax year).
For determining balance-due days, the previous-year taxable income of corporations and associated, subsidiary, and predecessor corporations means taxable income before considering specified future tax consequences, such as applying loss carrybacks.
For information on your business limit, see chapter 4 of Guide T4012, T2 Corporation – Income Tax Guide.
Changes to your business
Your balance-due day may be affected by certain events like amalgamations or wind-ups.
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