T2 return (corporate income tax)

The T2 is the tax return that an incorporated business (a corporation) files annually with the federal government through the Canada Revenue Agency (CRA). In Quebec, the CO-17 is also required, this is the same return filed with Revenu Québec. Both returns must be filed, even if there is no income, within six months of the end of the fiscal year.

At a glance

Form T2 is a corporation’s federal tax return (filed with the CRA, the Canada Revenue Agency)
The CO-17 is its equivalent in Quebec (with Revenu Québec)
Required every year, even if the company has not earned any income (in which case a “blank” return is filed)
Must be filed within six months of the end of the fiscal year (the business’s financial year), along with its financial statements (a summary of its accounts in figures)
Note on deadlines: The return is due within six months, but the tax is generally due earlier (two months after the end of the fiscal year, three months for an eligible small business).

Why it matters

Think of the T2 as your business’s mandatory annual “financial report”: it tells the tax authorities how much the business earned and how much tax it owes. Failing to file it or filing it late can be costly: penalties (for example, 5% of the unpaid tax, plus 1% per month of delay) and interest that accrues daily. Preparing it requires properly prepared financial statements (the balance sheet and income statement, that is, what the business owns, owes, and has earned). Bankeo will connect you, for free, with a vetted accountant or CPA (Chartered Professional Accountant) who will prepare your financial statements, legally minimize your tax liability, and meet all deadlines. We’re here to support you every step of the way.

The T2 form is a direct result of the incorporation : As soon as you form a corporation, this obligation arises, even in a year with no income. It does not replace your T1 return For individuals: how you pay yourself, in as salary or as a dividend, determines the amount of tax you’ll pay personally. Here’s a helpful figure: in Quebec, an eligible SME benefits from a combined tax rate of approximately 12.2% on its first $500,000 in profits, well below the general rate. The forms and deadlines are detailed by the Canada Revenue Agency. With the right support, the T2 becomes a manageable formality: Bankeo will connect you, at no cost, with the accountant who prepares it and provides ongoing support.

Frequently asked questions

What is the T2, in simple terms?

This is your incorporated business’s annual tax return, filed with the federal government (the CRA, Canada Revenue Agency). It states how much the business earned and how much tax it owes. In Quebec, the CO-17 form is also filed with Revenu Québec.

Does an inactive company still have to file a T2?

Yes. Even if the company did not make any sales or earn any income during the year, it must file a so-called “blank” return with the federal government (T2) and the Quebec government (CO-17). Failure to file may result in penalties.

Who can prepare my T2 and CO-17?

These returns require properly prepared financial statements (the business’s balance sheet and income statement), which is a technical task. Bankeo will connect you, for free, with a vetted accountant or CPA who will prepare them, legally minimize your tax liability, and meet the six-month deadline. We’re here to support you every step of the way.