Inactive Corporate Tax Return – You Still Need To File
Posted On: 25/07/25 - 0

Some entrepreneurs make wrong assumptions if their business did not make any money in any particular tax year. They think there is no need to file an inactive corporate tax return. This is wrong information that can cause you a lot of money down the road. I will explain why it is critical to file each year in spite of the lack of revenue.

Who Must File an Inactive Corporate Tax Return?

All Canadian residents that own corporations must file a corporate tax return. It must be filed each and every year that the business is up and running. This also applies to those entrepreneurs that have had an inactive year with no revenue. As long as the business is legally incorporated, you are required to file a tax return.

When Do You File A Corporate Tax Return?

You must file a corporate year end within 6 months of the end of that company’s tax year.

What Is The Penalty If You Have Not Filed An Inactive Corporate Tax Return?

There is a penalty for not filing a corporate tax return for an inactive business. This penalty is $25.00 per day up to a maximum of $2,500.00.

What Is The Penalty If You Do Not File On Time & You Owe Taxes?

If you have made some income in that tax year and you file late, there is still a penalty. The Canada Revenue Agency will charge you 5% of the unpaid tax that is due. There is a further 1% of this unpaid tax for each month that the return is late.

If you want to avoid costly penalties and want to close your business, call a tax professional. Are you not sure of your filing obligations? call a tax specialist. If you want to get compliant with the CRA, find a tax office. One that can navigate the complexities to get you on side with the CRA. Making this call will help you save money by eliminating further imposed penalties.

Our team of professional, experienced and designated tax experts will ensure that your inactive corporate tax returns are filed accurately and on time.

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