When we ask customers if they have filed their “Corporate Annual Return,” they often say, “Yes,” thinking that we are referring to their Income Tax Return. However, a Corporate Annual Return is an entirely different return than a tax return. Anyone in charge of a company’s filings must understand the difference—as failure to file an Annual Return may result in involuntary dissolution of the company.
What’s the difference?
As you may already know, or have learned in a previous article from us, all jurisdictions within Canada require corporations to file some kind of corporate information return—often called an “Annual Return” (but not always—for example, in British Columbia, it is referred to as an “Annual Report”).
Annual Returns are short forms (usually 1 to 3 pages) that ask for basic information about your corporation: corporation name, corporation number, director names, director addresses, corporation address, etc. The Annual Return forms must be submitted every year in order to remain compliant with the laws of your governing jurisdiction. The Annual Return filing lets the government know that your corporation is still active and that your records are up-to-date.
The Annual Return is different from a tax return, which is what you submit to the Canada Revenue Agency (“CRA”) so that they are aware of your Corporation’s financial status and can tax the company accordingly. Tax returns are completely different, and separate laws govern them, so it is important that they both get filed and they don’t get confused as one.
In Ontario, the Corporate Annual Return used to be filed at the same time as the corporation’s tax return. However, this is no longer an option; corporations are now responsible for filing their Annual Return separately.
We hope this article gives you a better understanding of the difference between annual Corporate Information Returns and Tax Returns. Most corporations choose to seek assistance from an accountant for their tax returns, as accountants provide invaluable guidance and knowledge when it comes to tax matters.
Some corporations choose to file Annual Returns on their own, or they seek assistance from a Corporate Lawyer or service provider (such as Tobuso). If you have any questions or need assistance in filing your corporation’s Annual Return, please don’t hesitate to contact us here. Our annual maintenance package also includes the annual return filing. Click here to get started!
Alternatively, we offer a robust platform for managing and sharing your corporate records—secure and reserved for those you trust. Sign up today!
