Tax Filing Deadlines in Canada

What You Need To Know For Tax Compliance

Canadian Tax Due Dates By Type of Tax

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HELLO and a very warm welcome to bookkeeping-essentials.com .

Once you have found the tax filing deadlines information you were looking for, I invite you to get a cup of tea, take a few moments to relax ... and discover the wealth of information on this site ... designed to be your bookkeeping resource.

For example, you may be interested in "The Rates" page which has tax compliance rates ...

... or maybe "The Tax Plan" page which is the first article in a series on small business tax planning opportunities.

Whatever your interest, I hope you enjoy your visit and come back often. :O)

Notice to Site Visitor

I developed this tax filing deadlines page as a handy reference for myself. While I do my best to ensure it is accurate and complete, I make it available for your use with the understanding that I cannot be held liable for errors and/or omissions. Please make yourself familiar with my site policies prior to relying on any of the information on this site.

Quick Links to Tax Filing Deadlines by Tax Type

• February 2012 Tax Filing Deadlines

Income Tax Filing Dates

• Income Taxes for Self-Employed / Small Business Owners (forms T1, T2125)
• Income Taxes for Corporations including CCPC (form T2)
• Director's Liabilty for Unpaid Corporate Income Taxes

Canadian Sales Tax

• GST/HST (form GST34-2 and form GST34-3)
• PST in BC (form FIN 400)
• Director's Liabilty for Unremitted GST/HST Owing

Payroll Taxes

• Payroll Source Deductions (form PD7A)
• Late-Filing Penalties for Information Returns
• Payroll Checklists - Hiring and Terminating Employees
• Payroll T4 and T4A Information Returns - find 2012 T4 tax filing deadline here
• T4As and Subcontractor Payments - CRA is auditing this area
• T4 and T4A Special Situations - find who must file online here
• T4 and T4A Late Filing Penalties
• WCB of BC (forms 1810, 1820)
• Director's Liabilty for Unpaid Source Deductions

The Bookkeeper's Notes On
Goods and Services Tax (GST)
Harmonized Sales Tax (HST)

Click here for February, 2012 tax filing deadline dates.

Your GST/HST return is paper filed on form GST34-2 E Personalized Return. The bottom portion of the form includes a line for remitting your payment. Do NOT use forms RC158 or RC177 to remit your normal reporting payment.

Once you are registered for GST, Revenue Canada mails the form ahead of your deadline. This enables you to meet your tax filing deadline.

Online filing is now available ... making meeting your tax filing deadlines easier than ever. You should step outside of your comfort zone and try it if you are still filing a paper return. It's quick and easy to use. There are two ways to file online:

1. GST/HST NETFILE - You will still need the paper form GST34-2 E Personalized Return sent you as it has your online access code on it.
2. My Business Account - You will NOT need the access code printed on the paper return. You will need what was formerly referred to as an epass ... no idea what CRA call it since they made changes in October 2010.

Since July 1, 2010, if CRA does not send you your paper form, it may be because you are now required to file online. If this is the case, CRA will continue to send you a remittance form with your access code on form GST34-3 E Electronic Filing Information Sheet.

The groups that must file online are registrants with annual taxable supplies of $1.5 million plus, BC or Ontario registrants with RITC requirements, and builders affected by BC and Ontario HST transitional rules.

If you fail to file in the correct format or file inaccurately, penalties will apply ... beginning after tax filing deadlines ending on or after October 1, 2010.

Not filing electronically will result in a $100 penalty. All subsequent failures result in a $250 penalty for each occurrence.

Filing inaccurately ... not reporting RITCs, grandparented housing rebates, new residential rental property rebates, grandparented housing sales subject to HST, new housing rebates assigned to builders, transitional new housing rebates and tax adjustments ... may be subject to:

• a $250 penalty; or
• a 5% penalty on the difference between was should have been reported and what was reported ... plus 1% per month to a maximum of 10% until amounts are corrected.

When filing online (through GST/HST NETFILE or My Business Account) and a balance is owing, you have three ways to pay it:

1. Pay it using CRA's new online service My Payment. There is a $50,000 threshold.
2. Pay it online through your financial institution. You have to pay a one time admin fee to begin using this service ... and then transactional service fees.
3. Pay by cheque.
• When paying by cheque, use form RC158 E, GST/HST Netfile/Telefile Remittance Voucher to remit your payment. This form is included on page 9/10 in your mail out from CRA.
• Page 7/8 of your reporting package has form RC177 E for balance due remittances required for use by annual filers.

The biggest mistake new business owners make is to use funds collected in trust to finance their business or personal lifestyle. It creates a vortex many small businesses never climb out of.

It's important to remember GST/HST funds (and payroll source deductions) are collected on behalf of the government. They are held informally in trust by your business until remitted.

To reduce the temptation to spend trust funds for your own personal expenses ... or to cover your business expenses, open up a savings account. At regular intervals, transfer your GST/HST collected into this savings account.

When you file your GST/HST quarterly (or annual) reports, pay (or transfer) any amounts owing from this account.

Taking this one action will ensure that you don't have huge tax amounts owing to the CRA which grow due to penalty and interest charges.

CRA can and will collect unremitted trust funds by any means allowed under federal legislation such as seizure and sale of assets, garnishments, and assessment of directors.

Reference Source: CRA> Newsroom> Alert> 2010> Tax alert - Abuse of source deductions and GST/HST amounts held in trust

How is my tax filing deadline determined?

Your tax filing deadline / due date for GST/HST is determined by your reporting period. Reporting periods are determined by your annual sales ... not whether you are a corporation or a sole proprietor.

Each assigned reporting period has an optional reporting period that you may opt for. If you are an annual filer, you should consider opting to file quarterly so you can claim your offsetting ITCs faster. Why?

When your net sales tax in a year is $3,000 or more, an annual filer must make equal quarterly installments (reporting them on line 110 of your GST return) in the next year ... without claiming the offsetting ITCs.

Small business owners often intermingle the GST funds collected with their own (instead of holding them in a separate account). Then they end up using the GST funds collected in trust to meet their cash flow requirements ... and get themselves in hot water when the GST funds collected are not available to remit to CRA come filing time.

By opting for a more frequent reporting period, you are less likely to think of the money as your own ... and less tempted to spend the funds held in reserve for the government ... with the added bonus of claiming your ITCs four times a year instead of once a year. That's why my preference is to reduce your risk by filing quarterly.

I've seen some business owners get into financial trouble by failing to meet their tax filing deadlines ... and falling behind on their GST/HST remittances because ... they spent the GST/HST funds. There was no intentional duplicity on their part. It's just that they were positive they had enough input tax credits (ITCs) to offset the payment owing.

If December 31 is your year-end date ... and you are an annual filer, consider this tip.

To meet the tax filing deadlines requirement and avoid interest charges, pay your GST/HST owing by the Balance Due Date of April 30th, even if you are filing by the June 15th deadline ...

Don't know if you are going to owe a payment or get a refund?

Your bookkeeper should be able to provide a fairly accurate ESTIMATE if your books are up-to-date. (You are getting your books done at least quarterly aren't you? If not, why not?)

If you want to switch from annual filing to quarterly filing (so you can recover your ITCs throughout the year instead of just once a year), it must be done before the end February. Complete Form GST20 Election for GST/HST Reporting Period ... or it can be done over the phone with a CRA representative.

Read more about GST/HST tax compliance here.

The Bookkeeper's Notes On
B.C. Provincial Sales Tax (PST)

Click here for February, 2012 tax filing deadline dates.

BC (and Ontario) no longer charge PST. HST began July 1, 2010 with transitional rules beginning May 1, 2010. Your final PST return was due July 23, 2010.

Supplemental returns should have been filed no later than January 23, 2011. (These dates apply to Ontario as well.)

Your BC HST filing due dates and deadlines are now the same as your GST. Your BC HST is filed on the same report as your GST.

However, BC held a referendum on the HST in July 2011. HST was voted out so PST will be returning to B.C. The expected date is March 2013.

Prior to July 1, 2010, your BC PST tax filing deadlines and due dates were determined as follows. It is expected that we will revert back to this about March, 2013.

The Bookkeeper's Notes On
Payroll Source Deductions

Click here for February, 2012 tax filing deadline dates.

Click here for payroll tax rates.

When an employee is paid (not earned) determines the payroll remittance due date. Don't confuse this with GAAP guidelines for the matching principle where you record wages when they are earned (worked) not paid.

Source deductions are reported on a quarterly, monthly, semi-monthly or weekly basis on form PD7A. Your reporting period is assigned by CRA based on your remitter type (discussed below). Revenue Canada mails the form ahead of your due date enabling you to meet your tax filing deadlines.

You have two options for filing online:

1. using My Payment
2. through your financial institution. It may require payment of an initial administration fee to get setup.

For small businesses, monthly filers are the most common reporting period with quarterly filers being the other common period.

Meet your tax filing deadline by ensuring you don't make this mistake with the payroll source deductions you have collected in trust.

CRA determines your remitter type by calculating your average monthly withholding amount (AMWA). They add up all source deductions sent over the past two years divided by the numbers of payment periods over one year.

*Must have perfect payroll tax compliance history over a twelve month period to qualify. If not, you must remit monthly. If you qualify, CRA will notify you.

**Remittances must be done through a Canadian financial institution one full day prior to the due date to avoid penalty charges.

Ceridian has a number of payroll checklists that you should consider adapting for your own use to ensure you meet all your tax filing deadline obligations as an employer. They have lists for:

• hiring new employees and requesting their social insurance number (SIN); and
• terminating an employee and/or preparing the Record of Employment (ROE).

Their website also has an excellent small business payroll year-end guide in their resource section. While the lists are for Ceridian clients, you should be able to modify them for your purposes.

Sometimes, they move the pages around on their website. If by some chance the above link is not working, go to www.ceridian.ca and locate their resources and tools section. Hunt around in that area and you will find it.

CPP (Canada Pension Plan) is one of the tax compliance items that must be deducted from an employee's pay cheque.

CPP is in effect across all provinces and territories however Quebec has its own program QPP. Everyone between the ages of 18 and 70 who are employed must contribute to the plan with 50% of the contributions paid by the employer. It is a mandatory employment deduction. Self-employed business owners pay both the employer and employee portion.

So do you ever wonder how you will receive your CPP benefits?

While CPP is a contributory plan based on your employment earnings, the CPP system is not a self funding plan.

It used to be that your contributions did not go towards funding your own pension ... they went to funding today's pensioners. That meant today's workers funded today's retirees.

However, the CPP system is now funded on a steady state basis. Current contribution rates are designed to create a constant fund over 75 years ... which means the Canada Pension Plan is actuarially sound for the next 75 years

Read more: http://www.cbc.ca/money/story/2010/03/24/flaherty-pensions.html#ixzz11mZtbjXP

There are three types of CPP benefits - disability, survivor, and retirement. I'm going to chat about the retirement benefits.

The pension is designed to replace about 25% of your average earnings over the years. It does not start automatically. You must apply to receive to begin receiving your retirement benefits.

I was reading Advice Hotline, a free e-publication by MPL Communications Inc. They had a short write-up this month (July 2009) on how our current CPP system works ...

... I thought I'd share the simplified overview with you because I find I do better work when I understand the background to a subject ... especially tax compliance items.

To receive a full pension from the CPP you have to have paid into it for 40 years. The earliest you can begin contributing is age 18. This means it is possible that you would be eligible for a full pension at age 58.

If you retire before you reach the full 40 years, your pension is prorated based on the number of years you paid in ... so if you contributed for 37 years, your pension would be prorated to 37/40 = 92.5% of the full benefits.

There is a catch though ... isn't there always. To be eligible for a pension, you have to have contributed for a minimum of 20 years. (The Pension Puzzle - see below - says that you qualify for a pension if you've made just one contribution ... but your pension would be very small.)

The CPP system is setup to assume you retire at the age of 65. If you elect to retire earlier (between 60 and 64), your pension is reduced 1/2 of 1% per month. So if you chose to retire at age 60, your pension benefits would be reduced by 30% permanently.

The reverse is also true. If you wait until 70 to receive your pension benefits, your benefits would be increased by 30% for the remainder of your life.

You can read about proposed changes to CPP here.

If you are interested in reading more about how pensions work in Canada, Bruce Cohen and Brian Fitzgerald's book entitled "The Pension Puzzle, Your Complete Guide to Government Benefits, RRSPs and Employer Plans" is an excellent read. It was last published in 2007 so although some of the information has changed, it is still a valuable guide.

If nothing else, the book explains and assures you that the changes made to the CPP system in 1998 ensures you will have CPP benefits when you retire ... this perhaps takes away a bit of the sting of meeting the tax filing deadlines a small business owner faces.

You get information about your CPP benefits from HRSDC. Two links that might be of interest ... You can estimate your CPP retirement benefits with the HRSDC Retirement Income Calculator ... and you can request a copy of your CPP Statement of Contributions.

You do not have to have a My Service Canada account to access the above information. If you have a My Service Canada account, you can view your CPP benefit information directly online.

I hope this bit of background on CPP makes it easier for you to understand and meet your payroll tax filing deadlines.

Payroll - T4 and T4A Information Returns

Employers need to have released T4 slips to employees on or before the due date (see box below). Failure to do so results in hefty fines.

You may be wondering whether you can give the employee an electronic copy of the T4 instead of mailing the paper slip. CRA says yes "if you have received the employee's consent in writing or electronic format".

--- 2012 T4 Due Date -- T4 Deadline 2012 ---
                Wednesday, February 29, 2012

It is important to remember that for the purpose of tax filing deadlines, income is reported in the year it was paid not when the income was earned. Do not confuse this with GAAP / ASPE reporting where you accrue unpaid but earned wage income in the year the wage was earned.

The easiest way to meet your tax filing deadline is to file your T4 Summary and slips online. Prior to the end of each calendar year (about the end of November), CRA sends you a letter with your online access code.

Effective January 2011, you can submit up to 6 T4 slips using the T4 Web forms online by going to the CRA website and selecting T4/T5 and other returns>Filing a T4 information return> T4 Web forms.

If you still want to file by paper (available only if you have less than 50 slips), go to the Businesses tab on the CRA website and select Payroll>Completing and filing information returns. Under each section, you will find fillable forms.

Pssst ...... Small Business Owners