DON'T BE FINANCIALLY RUINED BY THE CRA!
The Canada Revenue Agency requires you to file corporate tax returns no later than 6 months after the corporate year-end. HST returns are to be filed no later than 3 months after the year-end. Filing of a tax return is mandatory, even if a company has losses or is inactive.
What happens if you don't file your corporate tax return on time?
In the beginning, the CRA would send you a few reminders. However, if you procrastinate and ignore the tax filing requirements, the CRA will assess your tax liability based on their own estimates.
That assessment would not be favourable for you! Your company might have low profits or even losses but would be assessed by the Canada Revenue Agency for tens of thousands of dollars.
After the assessment is done, the CRA would start the collection process and freeze your corporate bank account. All of your funds would be garnished in an instance without any kind of warning. The directors of your company have personal liability for the unpaid HST. Therefore, the CRA would start collection money from the directors as well.
The irony of the situation is that your company could have little to no income tax liability and even be eligible for an HST refund. However, ignoring your filing deadlines can create a financial disaster for your business and your family.
We have been recently engaged by a Richmond Hill based business that received an assessment of about $100,000. The CRA assessed the corporate tax liability under the subsection of 152 (7) of the Income Tax Act. The reason why the Richmond Hill construction company received that tax bill is because they didn't file their corporate tax returns in 2015 and 2016. Our accounting firm was able to help the client to tackle the problem, reducing their tax bill significantly. Below, you'll find a letter that the company received from the CRA.
Our Vaughan based accounting firm can help you catch up on your overdue tax filings and renegotiate your tax liability with the CRA.