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What Happens If You File Corporate Taxes Late? Here's the Truth! #shorts

10 Dec 2024 · 1 min

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A short video by Bob Gauvreau explaining Canadian-style corporate tax timing and consequences for late action: any balance owing must be paid within 90 days of the corporation's year-end, while the corporate tax return can be filed within 180 days (six months) of year-end. If the balance is unpaid at filing deadline, a late-filing penalty applies (5% initially plus 1% for each month thereafter). Filing late also raises the company’s risk profile and may increase audit likelihood. An illustrative example: year-end March 31 → payment due June 30.

Questions this video answers

Within 90 days of the corporate year-end.

Within 180 days (six months) of the corporate year-end.

If year-end is March 31, the payment is due June 30.

5% initial penalty plus 1% for each month thereafter while late.

Chapters

What happens if we file our corporate taxes late? First, let's talk about the deadlines. Any balance owing is due within 90 days of your corporate year end date. For example, let's say March 31, your year end date, June 30 is when the payment needs to be made with respect to those taxes. Now, at the same token, even though that's a 90 day window, we have 180 days or six months to file our corporate tax return from that year end date. If you've paid your balance owing within 90 days and there's nothing owing, there's zero late filing penalty related to not getting your taxes filed by September 30th. If you choose to not make the payment that's owed at that 90 day period and it's still owing a filing deadline, you would have a late filing penalty. The penalty is essentially 5% in the initial month plus 1% per month following. Every month you're late, you get hit with another penalty. The other part that is important is if we file late, it enhances our risk profile rating, which ultimately could result in greater risk of being audited.