Corporate Tax Filing Basics: Key Forms and Schedules in the T2 Return – A Complete Guide by a Montreal CPA Firm Near You

Corporate tax filing in Canada is significantly more complex than personal tax filing.

Every corporation—regardless of size, revenue, or activity—must file a T2 Corporate

Income Tax Return annually, even if it has no income, no transactions, or is inactive.

Missing forms, incorrect schedules, or incomplete disclosures can trigger CRA reviews,

penalties, or reassessments. Many business owners underestimate the complexity of

corporate tax filing and are unaware of the numerous schedules required, especially for

CCPCs, corporations claiming the Small Business Deduction, or companies with

multiple shareholders. Understanding the key forms and schedules in the T2 return is

essential for maintaining compliance, reducing audit risk, and ensuring accurate

reporting. This guide outlines the most important forms, CRA requirements, and

compliance obligations related to corporate tax filing in Canada.

Legal and Regulatory Framework

Corporate tax filing is governed by section 150(1) of the Income Tax Act, which requires

every corporation to file a T2 return within six months of its fiscal year-end. Tax

balances must be paid within two or three months, depending on the corporation’s

status. Corporations must follow CRA-approved accounting and reporting guidelines,

maintain proper books and records, and comply with required tax schedules, including:

• Schedule 1 – Net Income for Tax Purposes (adds back non-deductible expenses)

• Schedule 8 – Capital Cost Allowance (CCA)

• Schedule 50 – Shareholder Information

• Schedule 100 & 125 – Balance Sheet and Income Statement

• Schedule 200 – T2 Return Identification

• Schedule 400 series – Provincial tax filings

• Schedule 23 – Non-Capital Losses

• Schedule 31 – Investment Tax Credits

• Schedule 73 – Small Business Deduction

• Schedule 141 – Notes to Financial Statements

These statutory requirements form the foundation of corporate tax filing in Canada.

Key Court Decisions

Several court decisions highlight the importance of accuracy and completeness in

corporate filings.

In Les Promotions D.N.D. Inc. v. Canada, CRA denied Small Business Deduction claims

because the corporation failed to complete Schedule 73 properly. The court upheld the

reassessment, emphasizing precise reporting.

In McClarty v. Canada, the court ruled that inadequate shareholder loan disclosure in

Schedule 50 justified CRA’s adjustments.

In Iberville Construction v. The Queen, the court confirmed that incorrect CCA claims

due to incomplete Schedule 8 reporting resulted in reassessments and interest.

These decisions reinforce the necessity of preparing corporate returns carefully and

maintaining complete documentation.

Why CRA Targets This Issue

CRA considers corporate tax filing a high-risk area because corporations often involve:

• complex transactions

• shareholder loans

• capital purchases

• intercompany transactions

• dividend payments

• investment income

• Small Business Deduction claims

Because errors can significantly reduce taxable income, CRA frequently reviews

corporate T2 returns. CRA specifically targets:

• missing or incomplete schedules

• inaccurate shareholder information

• inconsistent financial statements

• aggressive CCA claims

• improperly claimed deductions

• corporations that file zero-income returns without proof

Incorrect T2 filing is one of the leading causes of CRA corporate audits.

Mackisen Strategy

At Mackisen CPA Montreal, we prepare complete, accurate, and audit-ready T2

corporate returns using a rigorous, structured process. Our approach includes:

• preparing full financial statements (Schedule 100 & 125)

• completing Schedule 1 to adjust accounting income to taxable income

• preparing detailed CCA schedules and reconciling asset classes

• analyzing shareholder loan accounts and completing Schedule 50

• calculating the Small Business Deduction using Schedule 73

• verifying previous-year loss carryforwards in Schedule 4 and Schedule 23

• confirming provincial allocation forms where the corporation operates in multiple

provinces

• preparing notes to financial statements (Schedule 141)

• ensuring GST/QST settlements reconcile with income statements

• conducting a final audit-proof review before filing

This ensures your corporation remains compliant and protected from CRA scrutiny.

Real Client Experience

A small corporation failed to complete Schedule 50 properly, listing incorrect

shareholder percentages. CRA demanded shareholder clarification and reassessed the

Small Business Deduction. We corrected the filings and reinstated the deduction.

Another client reported capital asset purchases but forgot to complete Schedule 8. CRA

denied the CCA claim. We reconstructed prior CCA schedules, resubmitted corrections,

and recovered the deduction.

In a third case, a business with intercompany transactions failed to file provincial

allocation schedules. CRA recalculated tax owing. We prepared complete filings,

resolved discrepancies, and prevented penalties.

These real cases illustrate the importance of properly preparing T2 forms and schedules

in corporate tax filing.

Common Questions

Business owners often ask whether a corporation with no activity must still file.

Yes—every corporation must file a T2.

Others ask whether dividends must be reported on the T2. Yes—dividends must be

documented through Schedule 3 and shareholder information.

Some ask whether CRA rejects incomplete returns. CRA may process them but will

issue reviews or reassessments.

Another question: How long should corporations keep records? At least six years after

the last tax year used.

These questions highlight the importance of understanding corporate tax filing in

Canada.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal

ensures that corporations file complete, accurate, and compliant T2 tax returns.

Whether your corporation is new, growing, restructuring, or planning to claim advanced

deductions, our expert team provides precision, transparency, and protection from audit

risk.