The 2013 federal Budget included measures to close corporate tax loopholes. The Ontario government will be proposing legislation to introduce new disclosure rules for aggressive tax avoidance transactions similar to the rules introduced by the federal government.
The Canada Revenue Agency (CRA) administers Ontario's corporate income tax, capital tax, corporate minimum tax, and the special additional tax on life insurers.
All incorporated businesses that maintain a permanent establishment (PE) in Ontario are liable for Ontario corporate taxes. A PE can generally be described as a fixed place of business such as an office, farm, factory, branch, warehouse etc.
Unincorporated businesses are not required to pay Ontario corporate tax. These include sole proprietorships and businesses run by individuals as partnerships. Owners of unincorporated businesses are, however, subject to personal income tax on an individual basis.
Generally, every corporation carrying on business in Ontario through a PE must file a T2 Corporation Income Tax Return (T2 return) with the Canada Revenue Agency (CRA) no later than six months after the end of the tax year. The T2 return generally includes the following Ontario corporation taxes: corporate income tax, including refundable tax credits, corporate minimum tax, capital tax and the special additional tax on life insurance corporations.
You may be required to make instalment payments, which are partial payments of the total amount of tax payable for the year. The balance of tax, which is the tax payable for the tax year after you have deducted the instalments already made for the year, is paid on your balance due date, which is three months after the end of the tax year for a canadian controlled private corporation (CCPC) or two months after the end of the tax year for a non canadian controlled private corporation.
For more information, visit the Canada Revenue Agency website: