What does this text mean in my Corporation Notice of Assessment ?
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I have a federal Canada Incorporation, and recently just did my year end taxes (within the 6 after my tax year end). Today, got my Corporation Notice of Assessment today. The Total Balance is 0.00$ But, I have just a question, at the bottom of the letter where it says "Explanation" it says this: We have set the balance due date at the end of the second month following the end of the tax year since our records indicate the corporation does not qualify for the one-month balance due date extension. What does a "one-month balance due date extension mean"? What does that text mean? Do I still have, like my prior years, 6 months after my tax year end to file my corporate federal year end taxes like I did in the past? Or, does that mean I have to file my corporate taxes within 2 months after my tax year end from now on? Any help is deeply appreciated!
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Answer:
First lets differentiate between the balance due date and the filing due date. Corporate tax returns are due to be filed within six months after year end, whereas the balance of taxes owing due date is either two or three months after year end. In general, a CCPC that qualifies for the small business deduction and whose taxable income in the previous year did not exceed the business limit (currently $500,000.) qualifies for the three month deadline. According to the assessment issued by CRA, your corporation no longer qualifies for the three month deadline for paying the balance owing, so if any taxes are owing next year you must pay them within 2 months to avoid interest charges (notwithstanding any instalments that you may be required to pay.) See below for a link to the CRA corporate tax guide which explains the rules.
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Other answers
It means you are not a small business any more, So instead of having three months to pay the balance of taxes owing after the end of the fiscal year, you now have two. There is no change in the due date to file the tax return. Just when the money is due.
Fred S
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