Generally, a Canadian resident corporation must file a corporate income tax return every year, even if it has no income, makes a loss or has no business activity.

This requirement is separate from other filing obligations, such as GST/HST returns and payroll reporting.

Operating in multiple provinces may create additional corporate income tax, sales tax or payroll obligations.

The requirements depend on where your business operates, the nature of its activities and the applicable federal and provincial rules.

Businesses expanding into another province should understand these obligations before beginning operations there.

Not every expense paid by a business is deductible for income tax purposes.

Generally, expenses must meet applicable tax rules and be incurred to earn business income. Some expenses may be fully deductible, partially deductible, deductible over several years or not deductible at all.

Maintaining proper documentation helps support eligible deductions.

The profit shown in your company’s financial statements may differ from the income used to calculate corporate taxes.

This happens because Canadian tax rules treat certain expenses, income and deductions differently from accounting rules.

For example, some expenses recorded in your financial statements may not be deductible for tax purposes, while other deductions may be available only when calculating taxable income.

A Canadian corporation may be able to change its fiscal year-end, subject to applicable tax rules.

In some circumstances, approval from the Canada Revenue Agency (CRA) may be required.

Before making a change, a business should consider the impact on its financial reporting, tax filings and other reporting obligations.

The CRA generally requires businesses to retain accounting records and supporting documents for at least six years from the end of the last tax year to which they relate.

Some records may need to be retained longer, depending on their nature and the circumstances.

Businesses should maintain an organized recordkeeping system and confirm the applicable retention requirements before disposing of documents.

If you discover an error in a previously filed tax return, the appropriate correction depends on the type of return and the nature of the mistake.

In many cases, businesses can request an adjustment or submit corrected information to the CRA.

It’s generally better to address errors promptly rather than leave them unresolved.

Your regular accountant can often handle ongoing tax compliance and planning. However, certain situations may require specialized tax expertise.

Examples include complex corporate reorganizations, international transactions, business acquisitions, ownership changes or significant tax disputes.

Your accountant and the specialist can work together to ensure that the advice is properly reflected in your company’s accounting and tax reporting.