Year-End Tax Checklist for Corporations – A Complete Guide by a Montreal CPA Firm Near You

A year-end tax checklist for corporations in Canada is essential for ensuring accurate

filing, minimizing tax liability, and avoiding CRA reassessments. Corporate year-end

brings together every aspect of the business’s financial activity—revenue, expenses,

payroll, dividends, GST/QST filings, asset purchases, shareholder loans, and retained

earnings. Missing even one component can lead to penalties, additional tax, or delayed

filings. Many small and medium-sized business owners enter their year-end

unprepared, unaware of the documentation required or the specific corporate tax

obligations they must fulfill. This guide provides a detailed year-end tax checklist for

corporations in Canada, including required documentation, key tax deadlines,

reconciliation tasks, and strategies to prepare your T2 corporate return accurately and

efficiently.

Legal and Regulatory Framework

Corporate tax filing obligations are governed by several provisions of the Income Tax

Act. Every corporation must file a T2 Corporate Income Tax Return no later than six

months after its fiscal year-end under section 150(1). Taxes owed must be paid within

two or three months after year-end, depending on the corporation’s status. Corporations

must prepare financial statements, reconcile income and expenses, calculate Capital

Cost Allowance (CCA) under section 20(1)(a), report shareholder loans under section

15(2), and declare dividends in accordance with section 82. Payroll obligations such as

T4 slips and T4 summaries must be filed by the last day of February. GST/QST filings

must follow assigned reporting periods. These legal rules form the structure of the year-

end tax checklist for corporations in Canada.

Key Court Decisions

Several court decisions emphasize accuracy and compliance in corporate year-end

filings. In McClarty v. Canada, the court emphasized proper separation between

shareholder and corporate transactions, warning that improper accounting can lead to

shareholder-benefit assessments. In Les Restaurants Au Vieux Duluth Inc., the Federal

Court reinforced the importance of accurate financial reporting and proper

documentation of dividends. In Iberville Construction v. The Queen, CRA reassessed a

corporation due to improperly classified expenses, leading the court to confirm that

corporations must follow proper accounting standards. These cases illustrate the legal

importance of preparing accurate financial statements and following a detailed year-end

tax checklist for corporations in Canada.

Why CRA Targets This Issue

CRA closely reviews corporate year-end filings because corporations often carry

complex transactions such as shareholder loans, capital asset purchases, inter-

company transfers, dividends, and retained earnings adjustments. CRA targets filings

where:

• shareholder loan accounts remain outstanding beyond permitted timelines

• dividends are paid without corporate resolutions

• corporate personal expenses are mixed with business expenses

• GST/QST filings do not match financial statements

• payroll records, subcontractor payments, and source deductions appear inconsistent

• large expenses or capital purchases lack documentation

• financial statements show repeated losses not supported by business purpose

Because year-end filings form the basis of corporate tax compliance, CRA treats this as

a high-risk area. Understanding the year-end tax checklist for corporations in Canada

helps prevent costly assessments.

Mackisen Strategy

At Mackisen CPA Montreal, we use a comprehensive and structured year-end process

to ensure compliance across all corporate accounts. Our year-end tax checklist for

corporations includes:

• reviewing trial balance, general ledger, and bank reconciliations

• ensuring all income and expense accounts are complete and accurate

• verifying GST/QST filings match sales and purchases

• reconciling payroll accounts and preparing T4 and T4A slips

• calculating CCA for all depreciable assets

• reviewing shareholder loan accounts for compliance with section 15(2)

• preparing dividend declarations with proper resolutions

• confirming the accuracy of financial statements

• reviewing inter-company transactions

• preparing adjusting entries for accruals, deferrals, and provisions

• completing the T2 return and provincial schedules

• planning for tax minimization strategies before the fiscal year closes

This structured approach ensures corporations meet every requirement while optimizing

tax outcomes.

Real Client Experience

A corporation approached us after receiving a CRA review because their GST filings did

not match revenue reported in their financial statements. We reconciled discrepancies,

corrected previous filings, and eliminated penalties. Another company had shareholder

loans outstanding for more than a year, exposing the owner to taxation on the full

balance. We implemented a repayment and dividend strategy to correct it. In a third

case, a rapidly growing business failed to record capital asset purchases correctly. CRA

denied their CCA claim. We corrected the asset schedule and helped them recover the

deduction in subsequent years. These examples demonstrate the value of following a

proper year-end tax checklist for corporations in Canada.

Common Questions

Business owners often ask whether they can extend their corporate filing deadline. The

T2 filing deadline cannot be extended, though payments may be made earlier. Others

ask whether dividends can be issued without resolutions. They cannot—CRA requires

documentation. Some ask whether shareholder loans are taxable. Loans not repaid

within one year after year-end may become taxable. Owners also ask whether

bookkeeping must be complete before year-end tax preparation. Yes—accurate

bookkeeping is the foundation of a proper year-end. These questions highlight the

importance of following a detailed year-end tax checklist for corporations in Canada.

Why Mackisen

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

corporations remain compliant, minimize tax, and prepare accurate year-end filings.

Whether you need a complete corporate year-end package, a review of shareholder

loans, or a full bookkeeping cleanup, our expert team ensures precision, transparency,

and protection from audit risk.