Canadian Tax

Page from 2010/2011

tempusfugit.ca

Whether to file a T2 or a CT23 - Ontario Corporate Tax Return


Whether a T2 or CT23 or EFF needs to be filed for zero tax situations.


If you live in Ontario you DO NOT need to file a CT23 for years after 2004 (i.e. 2005 to present)

T2 short-form 2009

See the changes in the 2005 filing guide below:

T2 short-form CRA guide 2005

Notes from when this page was originally written:

There seems to be a plan to implement a single corporate tax return instead of a T2 to the federal government and an other to a provicial government (CT23 - Ontario). The reluctance to use a T2 (or T2short - short form) is that you need to submit a set of financial statements (Balance Sheet) and a statement of revenue (Income Statement). In a zero tax situation the template for both would be simple and have "NIL" entered in all appropriate boxes on both.

Balance Sheets and Income Statements are pro-forma and are generally in the public domain. The templates for the ones linked below here were adapted from the company linked from the list below.

T2 short-form what you need to file schedules

For a "ZERO OPERATION" (Dormant) corporation the CT23 and its associated declarations and forms seem to be overly complicated in comparison to a T2 Short. All of these forms are downloadable from the CRA website. It is not necassary to obtain and use a commercial tax software package or to employ the services of a tax accountant.

However, the CT23 HAD to be filled and the corporate short-form was not accepable on its own.

CT23 Ontario Corp Tax Short-Form Return

Here is a sample of an Assessment of multiple CT23 submissions:

CT23 Ontario Corp Tax Short-Form Return Assessment

EFF - Exempt From Filing Declaration

Even if you have a dormant corporation with zero revenue and running costs (hence deductions) you cannot make a declaration for exemption from filing a CT23 unless you filed a federal T2 return.

Qualifing Ontario residents and corporations cannot file a T2 short and have to file the combined CT23 Short-Form Corporations Tax and Annual Return. (This could mean for years prior to 2006)

Update: 1 June 2010

The cover notes on the T2 now reflect that a T2 can be filed to cover the Federal and Provincial Corporate tax returns - there was no mention of a CT23.

The schedules that I prepared templates for are no longer required if the corporation had zero revenue. You can file them anyway - and as they were already filled in - they were.

I have copies of my own versions these templates based on the guidelines in GIFI (General Index of Financial Information) and are available on request. You can also obtain these for CRA.

The Provincial and Federal Governments don't seem to know what each other is doing!

Looking back over the years, that I have been tardly submitting corporate returns, I seem to have a mixed bag of NIL assesments from both governments.

I am sure that the issue revolves around the move to a single T2 submission and the reqiurement for a CT23 (Ontario) not having to be filed. It would appear that for some years I filed a CT23 when I didn't need to and the Ontario govenment had assessed me a zero balance. This, however, didn't stop the Federal governemnt in making a demand for a T2.

Hopefully this is now all resolved (we shall see) - all T2 forms have been submitted up to 2009 and requests for my Business Number and an Article of Dissolution has been submitted.

Update Fall 2010: - all returns are accepted and I am now up-to-date and was able to get my Articles of Dissolution processed.

Articles of Dissolution (Ontario)

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Quote from RedFlagDeals - Help with filling out T2 corporate tax return - 29 Dec 2010

I've registered a couple corporations that I haven't done anything with, but need to file the T2 tax form for the past few years. Does anyone know where I can find some info on how to properly fill out this form (gov site - instruction manual wasn't any help!), or is there anyone that can help me file for a reasonable charge. Every account I've contacted is asking for $400-600 to complete the forms.

You can do this for free! You don't need to hire an accountant or purchase TurboTax (QuickTax) Corporate. If you are dormant and filing a zero return, have no directors (apart from yourself) and the GIFI codes for your Balance Sheet and Income statement are irrelevent as you are not reporting anything (zero assets and revenue). You may, like me, have only setup the corporation on the advice of a so-called "expert" and now you are finding that it is a "pain in the neck".

Links

What a CT23 is and what it is not

A CT23 is not a short form for the T2 Federal Corporate Income Tax Return. It is an Ontario Provincial Corporate Rax Return that was used prior to 2005.

If you are looking for a short form then you need to file a T2 Short Return. Even if you carry out your business in Ontario you do not need to file a CT23 (the case now, 2012).

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