Taxes

For a corporation's first taxation year, monthly instalments are not required. In subsequent taxation years, monthly instalments are required unless either the previous taxation year's total tax payable or the current taxation year's total tax payable is less than $2,000. The monthly instalments are required to be paid on or before the last day of each month.

As announced in the 2001 Ontario Budget, the instalment requirements for small businesses have been simplified. Effective for taxation years commencing after December 31, 2001, corporations are permitted to pay their instalments quarterly if their tax payable in the current or preceding taxation year is greater than or equal to $2000 and less than $10,000.

For information on calculating your instalment payments, please refer to Information Bulletin 4007 "Tax Instalments and Payments" dated October 2002.

If the corporation was a Canadian-controlled private corporation throughout the taxation year and had taxable income of not more than the corporation's "Ontario business limit" for the previous taxation year, the "balance of tax due date" is on or before three months after the end of the corporation's taxation year. If the previous taxation year is less than 51 weeks, the "Ontario business limit" must be prorated. Please refer to Information Bulletin 4007 "Tax Instalments and Payments" dated October 2002 for information on calculating the "Ontario business limit".

In all other cases, the "balance of tax due date" is on or before two months after the end of the corporation's taxation year.

Where a payment is made at a financial institution, a remittance form is required.

Where a payment is sent by mail or delivered to an office of the Ministry of Revenue, the ministry prefers the payment to be submitted with a remittance form, however where that is not possible, the ministry will accept a payment without a remittance form. Please ensure that your corporations tax account number and the taxation year to which the payment should be allocated is clearly identified on the cheque and/or covering letter.

A cheque sent by mail should be sent to:

Ministry of Revenue
Revenue Operations and
Client Services Branch
PO Box 620
Oshawa ON  L1H 8E9

When a payment is made using the Internet Banking Service a remittance form is not required.

The interest shown on the Notice of Assessment / Reassessment is the interest owing as of the "assessment date" shown on the Notice of Assessment / Reassessment. The interest calculation is based on daily compound interest and is assessed on the outstanding account balance. Credit interest is paid if an overpayment exists in the account. For additional information on the calculation of interest, please refer to Information Bulletin 4010 "Interest on Overpayments, Underpayments and Instalments of Tax" dated December 2002.

Interest is charged on deficient instalments and on the late payment of the balance of tax due. When a corporation remits insufficient instalment payments, interest is charged on the difference between the actual instalments and the instalments required. Interest is also charged on the late payment of the balance of tax. If a corporation does not remit the balance of tax due until it files the CT23 Tax Return, it is remitting the balance late and will be assessed interest on the late payment. Tax returns are due six months after the taxation year end of the corporation; therefore, if a corporation pays the balance of tax due at that time, it is making the payment three or four months late.

If instalment payments are not required, the corporation's tax liability is due by the "balance of tax due date".

Payments sent electronically by the Internet on a particular day will be processed after midnight of the day of payment. This means that a payment that is due, for example, on June 30th must be entered by midnight June 29th in order to be processed on time. Similarly, post-dated payments must be dated at least one day prior to the due date to be processed on time.

The Internet Banking Service is an online tax payment service, available seven days a week, 24 hours a day, using a financial institution's website. It enables participating financial institutions' customers to electronically remit corporations tax payments via the Internet. This service is currently offered by many financial institutions to customers who have a business account with them. Visit your financial institution's website or contact them for assistance when accessing or navigating these electronic services.

Corporations tax payments may be made:

• at any financial institution in Ontario where you have an account (except caisse populaires or credit unions)
• by mail, or delivery to any Ministry of Revenue tax office
• electronically, using a financial institution's Internet Banking Service.