Missed the 2025 Corporate Tax Deadline? Penalties & How to Fix It
Stay updated with current accounting standards, business compliance, tax preparation tips, and latest news.
13 Apr 2025
Missing Canada’s corporate tax deadline is like skipping a loan payment because penalties start accruing immediately, and interest compounds until it's resolved. What starts as a small oversight can snowball into a serious financial liability. The sooner you act, the better your chances of limiting the damage.
The CRA won’t waive fines, yet solutions exist to navigate penalties and reduce stress. This blog breaks down what happens after missing the 2025 deadline and actionable steps to recover swiftly. Don’t let a late filing derail your finances; continue reading this blog to learn how to minimize corporate tax filing penalties.
Table of Contents
- Corporate Tax Payment Deadlines
- What Happens if You Miss the Corporation Tax Deadline?
- What to Do if You’re Late?
Corporate Tax Payment Deadlines
In Canada, corporate tax deadlines vary depending on your corporation’s fiscal year-end and whether you're making an installment or a balance payment. Here's a clear breakdown to help you stay compliant:- Filing Deadline: Corporations must file their T2 corporate income tax return within six months after the end of their fiscal year. For example, if your fiscal year ends on December 31, 2024, your filing deadline is June 30, 2025.
- Payment Deadline: Any corporate tax balance owing must generally be paid two months after the fiscal year-end. Some Canadian-controlled private corporations (CCPCs) may qualify for a three-month payment deadline if they meet certain conditions (such as having taxable income under $500,000).
- Installment Payments: If your total taxes payable exceed a certain threshold (generally $3,000 in either the current or previous year), you're required to make monthly or quarterly installment payments throughout the year.
Key Deadlines at a Glance
| Tax Obligation | Deadline |
| Filing T2 Return | 6 months after the fiscal year-end |
| Balance of Tax Owing | 2 months after year-end (or 3 months for eligible CCPCs) |
| Installment Payments | Monthly or quarterly, depending on your tax payable amount |
Example: December 31 Year-End
| Action | Deadline |
| Fiscal year-end | December 31, 2024 |
| File T2 return | June 30, 2025 |
| Pay balance owing | February 28, 2025 (or March 31 for eligible CCPCs) |
| Installments (if required) | Monthly or quarterly throughout the year |
What Happens if You Miss the Corporation Tax Deadline?
1. Late-Filing Penalty
If your corporation files its T2 return after the deadline, the CRA charges a late-filing penalty of:- 5% of the unpaid tax owed on the filing due date, plus
- 1% of the unpaid tax for each full month the return is late, up to 12 months.
2. Interest on Unpaid Tax
In addition to penalties, the CRA charges compound daily interest on any unpaid tax starting the day after your balance was due. The interest rate is set quarterly and is generally higher than what you'd earn in a bank savings account—so it adds up fast.3. Installment Interest & Penalties (if applicable)
If you were required to make tax installment payments and didn’t, the CRA may assess installment interest and even an installment penalty if the interest exceeds $1,000.4. CRA Enforcement
While the CRA doesn’t usually take immediate legal action for a late return, continued non-compliance could trigger:- Collection actions (like garnishing bank accounts)
- Freezing of assets or corporate accounts
- Loss of eligibility for certain tax credits or refunds
What to Do if You’re Late?
- File and pay as soon as possible: This minimizes penalties and interest.
- Contact the CRA if you’re struggling to pay—you may qualify for a payment arrangement.
- Request relief through the CRA’s Taxpayer Relief Program if your late filing was due to circumstances beyond your control (e.g., natural disaster, serious illness, etc.).
