In Canada, Annual compliance mandates federal and provincial reporting and taxation requirements, which have strict deadlines as they come with penalties, interest, and a deteriorating reputation. This applies whether you are a Canadian-controlled private corporation, a federal entity under CBCA, or a provincial registrant. This guide covers all requirements, steps, costs, and pitfalls. This guide includes submission steps, submission deadlines, chrono cost evaluation, common issues, and the way modern compliance tools like Commenda optimize company annual filings in Canada.
Who Must File Annual Compliance Reports in Canada?
Every corporate integration in Canada presents distinct compliance structures to the following:
- Federal Corporations (CBCA Entities)
- Canadian Controlled Private Corporations (CCPCs)
- Public Companies
- Unlimited Liability Companies
- Each corporation type must submit an Annual Return to Corporations Canada regardless of operational status.
- Provincial/Territorial Corporations
- Ontario (OBCA), British Columbia (BCBCA), Alberta (ABCA), Quebec (QBCA), etc.
- Every region has its own Annual Return processes, including registries.
- Extra-Provincial Registrations
- Corporations incorporated in one jurisdiction but registered to carry on business in another must submit extra-provincial annual information returns.
- Not-for-Profit Corporations & Cooperatives
- NPOs that are federally incorporated only need to submit a simplified return. Charities also need to submit T3010 returns to the CRA.
- Provincial cooperatives adhere to the provisions of the provincial co-op legislation.
- Non-Resident Corporations
- Branches and subsidiaries of foreign companies operating in Canada must comply with federal or provincial filing obligations.
Exemptions & Special Cases:
- Dormant federal corporations can opt for a dormant return for CAD 50 instead of the full fee.
- Small CCPCs under specific thresholds may qualify for simplified accounting under ASPE.
Annual Compliance Snapshot: Key Deadlines at a Glance
| Obligation | Due Date | Governing Body |
| Federal Annual Return (CBCA) | Within 60 days of AGM or anniversary date | Corporations Canada |
| Provincial Annual Return | Varies (e.g., Feb 28 in ON; Mar 31 in BC) | Provincial Registries |
| Corporate Income Tax Return (T2) | 6 months after fiscal year‑end | Canada Revenue Agency (CRA) |
| Financial Statements Submission | With T2, if requested by CRA | CRA / Shareholders |
| GST/HST Remittance & Return | Monthly/Quarterly/Annually by selection | CRA |
| Payroll (T4 Slips & Summary) | Feb 28 (slips) and Feb 28 (Summary) | CRA |
| Beneficial Ownership Registry (BOI) | Initial by Jun 30, 2025; updates within 30 days | Corporations Canada |
| Extra‑Provincial Annual Information Return | Within 60 days of registration anniversary | Provincial Registries |
1. Annual Return / Confirmation Statement
Purpose & Significance
The Annual Return confirms or rectifies:
- Registered Office Address
- Director(s) and Officer(s)
- Share Capital and Shareholder Details
- Corporate Name & Jurisdiction
It helps maintain accurate governmental and public records, which safeguards legal standing while ensuring transparency.
Federal Filing (CBCA)
- Anniversary Date
- Based on the incorporation date. Example: Jan 15 incorporation → Jan 15 annual return due.
- Online Portal
- Via Corporations Canada Online Filing Centre.
- Fee: CAD 12 (online) or CAD 40 (paper).
- Needed Information
- Corporate Profile Number (CPN).
- List of current directors with addresses.
- Confirmation of any changes since the last filing.
- Penalties
- CAD 250 for having a missed deadline.
- CAD 500 if overdue by more than 3 months.
- The company ceases to be in good standing until a return is filed.
Provincial Returns
- Deadline: 28th February of each year (or closest business day).
- Fee: CAD 20 (online).
- Filing Penalty: CAD 50 daily up to CAD 1,000 for late filing.
2. Corporate Income Tax Return (T2)
Scope & Obligation
All resident corporations and certain non-resident branches must file T2 annually, even with zero taxable income.
Filing Deadline
- Due Date: 6 months after fiscal year-end. Example: Dec 31 year-end → T2 due by June 30.
- E-File: via CRA’s Corporation Internet Filing (CIF) or EFILE through certified software.
Calculating Taxable Income
- Prepare Financial Statements
- Income Statement, Balance Sheet, Notes.
- Adjust Accounting Income
- Add back non-deductible items (e.g., entertainment 50%), and adjust for applicable deductions.
- Apply Tax Rates
- Small Business Rate (CCPCs): 9% on the first CAD 500,000.
- General Rate: ~15% federal + provincial (combined ~25–27%).
- Installment Payments
- Required if prior-year net tax > CAD 3,000.
- Frequency: monthly or quarterly.
Penalties for Late Submission and Payment
- Late Filing: Unpaid tax will be charged at 5% plus an additional 1% for each month up to a maximum of 12 months.
- Late Payment: Interest is charged at the CRA-prescribed rate (currently ~5% per annum), compounded daily.
3. Audited vs. Unaudited Financial Statements
Statutory Audit Requirements
- Public Companies: Maintain an annual audit under IFRS.
- Private Companies: No statutory audit threshold under tax law; however, ASPE or IFRS audited statements are often required per lender or shareholder agreements.
Accounting Standards
- IFRS: Mandatory for public issuers.
- ASPE: Optional for private companies, may simplify business structure.
- IFRS for SMEs: Available to qualifying private entities.
CRA Requests
- While CRA does not routinely ask for audited records, it may demand verified financial statements during reviews. Maintaining audit-quality accounting records reduces audit risk.
4. Beneficial Ownership and KYC Declarations
Federal BOI Registry Launch
CBCA entities must submit Beneficial Ownership Information starting June 30, 2025:
- Who constitutes a BO: Any individual who controls more than 25% of shares, votes, or has significant influence.
- Initial Filing Deadline: June 30, 2025.
- Update Window: 30 days after any ownership change.
Submission Process
- Collect BO Data: Name, DOB, address, residence jurisdiction, SIN/passport.
- File Online: Via Corporations Canada’s BOI portal.
- Maintain an internal register: Ensure up-to-date records are kept at the corporate office.
Penalties
- Failure to File/Update: Up to CAD 5,000.
- Continued Non-Compliance: Personal liability for officers, potential jail time.
5. Payroll, GST/HST & Other Periodic Filings
Payroll (T4 Slips & Summary)
- Due Date: February 28 of the following year.
- T4 Slips: Issued to employees showing compensation and CPP/EI deductions.
- T4 Summary: Totals of all slips filed are submitted to CRA.
Late Filing Penalties:
- CAD 100 per day to CAD 2,500 cap for large employers; CAD 50 per day to CAD 1,000 cap for small.
GST/HST
- Registration Threshold: CAD 30,000 of worldwide taxable supplies over a rolling 4-quarter period.
- Filing Frequency: Annual (if < CAD 1.5 million revenue), quarterly, or monthly by-election.
- Due Date: 1 month after the reporting period for monthly, 3 months for quarterly, and 3 months after the fiscal year-end for annual.
- Late Remittance Penalty: 1% of net tax owing for each month overdue; minimum CAD 25.
Other Filings
- Payroll Deductions Remittance: Due by the 15th of the following month or by the next business day.
- Import/Export (B3 Entry): Submitted per shipment to CBSA within 45 days.
- Excise and Air Travellers Security Charges: Due monthly or quarterly, based on requirement.
Penalties for Late or Inaccurate Filings in Canada
| Filing Obligation | Penalty |
| Annual Return | CAD 250 immediate; CAD 500 after 3 months |
| T2 Return | 5% + 1%/month up to 12% |
| GST/HST | 1%/month net tax; min CAD 25 |
| T4 Slips/Summary | CAD 50–100/day up to CAD 1,000–2,500 |
| BOI Registry | Up to CAD 5,000 |
| Payroll Remittance | 3% of amount overdue |
Annual Compliance Cost Breakdown
| Cost Item | Govt. Fee | Accountant Fee | Audit Fee Range | Time Cost (Days) |
| Federal Annual Return | CAD 12 | CAD 500 | N/A | 1 day |
| Provincial Return (Ontario) | CAD 20 | CAD 300 | N/A | 0.5 day |
| T2 Corporate Tax Return | CAD 0 | CAD 1,500 | N/A | 2 days |
| Financial Statements (Private) | N/A | CAD 2,000 | CAD 5,000–15,000 | 5 days |
| T4/T4 Summary | CAD 0 | CAD 300 | N/A | 1 day |
| GST/HST Return | CAD 0 | CAD 500/period | N/A | 1 day/period |
| BOI Filing | CAD 0 | CAD 400 | N/A | 1 day |
60‑Day Compliance Sprint Checklist
| Days | Task | Owner |
| 1–10 | Close prior FY books; finalize P&L & BS | Finance |
| 11–20 | File Federal Annual Return (CBCA) | Corp Secretary |
| 21–30 | Prepare T2 Return; calculate tax liabilities | Tax Advisor |
| 31–40 | File T2 & remit tax; set up instalments | CFO |
| 41–45 | Issue T4 slips; file T4 Summary | Payroll Manager |
| 46–50 | Reconcile & file GST/HST returns | Accounting Team |
| 51–60 | Submit BOI Registry filing & update internal register | Legal/Compliance |
Common Mistakes & How to Avoid Them
- Mismatched Fiscal Year-End
- Problem: Overlapping deadlines across submissions.
- Prevention: Align year-end accounting periods, set compliance deadlines, and document in a compliance calendar for Canada.
- Unsigned Annual Returns
- Problem: Rejection by registries.
- Prevention: Create and use an electronic signature process to obtain approval from directors for signatures.
- Under-declared Sales for GST/HST
- Problem: Audits, along with imposed fines.
- Prevention: Implement invoicing and automated tax calculation with accounting integration to avert under-reporting sales.
- Delayed BOI Updates
- Problem: Fines of CAD 5,000.
- Prevention: Set automated alerts for required changes and submit documents within 30 days of ownership changes.
- Incorrect Currency Exchange Rate Used
- Problem: Misstatement of expenses and revenue reporting.
- Prevention: Use and document the Bank of Canada’s noon rate as the exchange policy on record for all quotes of the day’s exchange rate.
How Commenda Simplifies Annual Compliance And Tax Filings
The dashboard’s compliance calendar Canada feature from Commenda integrates corporate registry and CRA deadlines in one view. It auto-populates company annual filing in Canada forms, e-files T2, GST/HST, T4, and BOI returns through secure API integrations, and issues direct reminders in real-time. AI-driven validation identifies and corrects omissions and discrepancies, reducing administrative workload for over 50 jurisdictions by 80%. With expert guidance and audit-ready logs provided, manual estimation is eliminated while compliance remains on autopilot.
Request a demo of Commenda and see the transformation of the platform in turning the annual compliance into a hassle-free process.
Frequently Asked Questions: Annual Compliance in Canada
Q. What is the penalty if my business does not meet the annual return deadline in Canada? When do penalties start accruing?
Failing to meet the 60-day deadline will result in an automatic CAD 250 penalty. This fee escalates to CAD 500 after 3 months and will block additional filings.
Q. Is it true that inactive companies have to file returns even if they have ceased operations?
Dormant corporations must still file a nil T2 return and Annual Return. However, if they have never engaged in business activities, they are exempt from providing financial statements.
Q. What is the Revenue or Asset benchmark required to reach the statutory audit threshold in Canada?
In Canada, tax audits are not mandatory. Corporate audits, however, whether they are conducted for public or private companies, are governed by legal frameworks or shareholder/lender contracts.
Q. Is it possible to move year-end dates to streamline the compliance timelines for filing in Canada?
Yes, but you will have to submit a request to the CRA for a different fiscal year end and notify provincial registries if required.
Q. Which documents need to be filed with the corporate tax return for small businesses in Canada?
As with other corporations, small businesses need to file the tax return with requisite financial statements, T2 Schedules, and any applicable election forms.
Q. What is the method for accruing interest on overdue corporate tax payments in Canada?
At the current average of 5%, the interest accrues daily and is compounded until the balance is cleared in full.
Q. Startups that are based in Canada, do they qualify for the micro-entity or small company exemption for not submitting full financial statements?
For tax purposes, there is no micro-entity exemption, as all T2 returns must have supporting documentation, although private audit waiver provisions might apply.
Q. Do BOI filings form part of the annual filing package, or are they governed by a separate deadline in Canada?
BOI filings are governed by a different deadline (initially by June 30, 2025, and then 30 days after for updates) separate from Annual Returns.
