When are Canadian Taxes Due for Small Businesses?

The Canadian tax return deadline in 2023 will differ for businesses, depending on how they are structured. Small businesses that are run as a sole proprietorship or partnership will have different filing deadlines than those run as corporations.

Next: What is a Tax Write-Off?

Income Tax Deadlines for 2023

Before COVID-19, most individuals filed their Canadian income tax returns by April 30 each year. If the due date falls on a Saturday or Sunday or statutory holiday, payments are considered on time if the CRA receives it on the following business day.

Except for Quebec, people should file a single return for both federal and provincial taxes in all Canadian provinces. Learn more about small business tax preparation.

Corporate Tax Deadlines

Corporation income returns must be filed no later than six months after the end of the tax year in question. A tax year is a corporation’s fiscal period, which will differ by business, meaning the deadlines will also vary accordingly.

Suppose a corporation’s tax year ends on March 31, its filing deadline will then be September 30. If the corporate fiscal period ends on September 23, then their income tax filing due date will be March 23.

Sole Proprietorship or Partnership Tax Due Dates

Businesses owned by sole proprietors or partnerships run their tax years based on the calendar year. This means the filing deadline is a set date. Therefore, business owners must file their income taxes by June 15 each year.

However, by April 30, businesses must pay off their taxes owing from the previous tax year. With this in mind, it is best to file your income tax returns before the month of June, aiming for the end of April to align with the payment deadline.

Sole proprietors must include the details of their small business on their own personal tax returns. When a company is structured as a partnership, individual partners must file a partnership information return by March 31.

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Self-Employed Tax Deadlines

The CRA dictates that most self-employed individuals must use December 31 as their fiscal year-end date. Those who work on contracts, as freelancers, or consultants, would be considered self-employed. Like business owners, these individuals must file their income tax returns by June 15 every tax year.

What Happens if My Taxes are Filed Late?

Tax returns must be postmarked or filed electronically by the deadline given. If your returns are late, the CRA will penalize you for 5% of any tax still owing. The penalty will increase by 1% of the unpaid amount with each full month the return is delayed. This penalty will continue for up to a maximum of 12 months.

To avoid this penalty, you should file your returns on time, even if you might not be able to pay the amount right away. This way, you will not incur the penalty fees, even though interest will still accrue on the unpaid balance.

Sales Tax Deadlines

So when is HST due? Filing a HST/GST return will depend upon your business’s reporting period. As a result, filing deadlines and payment deadlines will differ based on monthly, quarterly, or annual (calendar and fiscal year) filing periods.

Your business’s GST/HST filing and payment deadline would fall one month after the end of your reporting period for monthly and quarterly filing periods. For example, if your business’s reporting period ended on July 31, your sales tax filing deadline and payment deadline would fall on August 31.

For annual reporting periods, businesses can expect their GST/HST filing and payment deadlines to fall three months after their fiscal year-end. If the reporting period is for August 31, then the deadlines for sales tax filing and payments are due November 30.

Accounting Software that Helps Small Businesses Meet Tax Deadlines

Ensure your business is ready for the 2022 income and sales tax deadlines! QuickBooks accounting software can help small business owners and self-employed individuals prepare their taxes for Canadian filing deadlines. Try it free today!

Next: What is a Tax Write-Off?

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