Mandatory Internet Filing for T2 Corporation Tax Returns

Why is the Government making internet filing mandatory for corporation income tax returns?
How do I internet file my T2 corporation income tax return?
What are the advantages of internet filing my return?
Will all corporations be required to internet file their T2 Corporation Income Tax Return?
Why are some corporations excluded from this requirement?
How would I determine my gross revenues, is there a specific line on the T2 Corporation Income Tax Return?
If my corporation doesn't have gross revenues in excess of $1 million, can I still internet file my corporation income tax return?
When will internet filing become mandatory?
Is there an additional cost to internet file my T2 Corporation Income Tax return?
What will happen if I am required to internet file my return but I send the CRA a paper return instead?
What is the penalty amount, and how is it applied?
Does the CRA review internet filed returns differently from paper returns?
Will I still need to submit paper documents to the CRA?
Do requests to amend a previously filed return also need to be internet filed?
Where can I get more information about filing my corporation income tax return over the internet?

1. Why is the Government making internet filing mandatory for corporation income tax returns?

This change is a move to increase the efficiency of government while also delivering service and value to taxpayers. This change is also consistent with other leading tax administrations. More than 90% of corporate tax filers produce their returns using commercial software today, so this is about how they transmit the information to the CRA. Having large corporations make use of available technology not only makes good business sense, but it also supports sustainable development.

2. How do I internet file my T2 corporation income tax return?

You must use CRA approved commercial software and transmit your T2 return using CRA's Corporation Internet Filing service or My Business Account.

3. What are the advantages of internet filing my return?

Internet filing offers the following distinct advantages:

convenience - file from the office or from home - the Corporation Internet Filing service is available 21 hours a day, Monday to Saturday, and 20 hours on Sunday.
traditional delivery expenses and delays are eliminated with internet filing.
immediate acknowledgement of filing - no more guessing as to whether your return has been received.
sustainable development – reduces paper consumption and storage requirements.

4. Will all corporations be required to internet file their T2 Corporation Income Tax Return?

All corporations who have gross revenues in excess of $1 million will be required to internet file their T2 return with the exception of; insurance corporations, non-resident corporations, corporations reporting in functional currency, and corporations that are exempt from tax payable under section 149 of the Income Tax Act. The fact that some corporations will not be required to internet file does not affect the general requirement that corporations must file a T2 Corporation Income Tax Return.

5. Why are some corporations excluded from this requirement?

Some corporations are not able to internet file because they have unique reporting requirements. However, the CRA will continue to seek ways to make internet filing available to all taxpayers.

6. How would I determine my gross revenues, is there a specific line on the T2 Corporation Income Tax Return?

A corporation's gross revenues, for the purpose of determining whether they must internet file, can be calculated by adding lines 8299 and 9659 on the GIFI (General Index of Financial Information).

7. If my corporation doesn't have gross revenues in excess of $1 million, can I still internet file my corporation income tax return?

Yes, the CRA encourages all corporations to internet file and take advantage of the associated benefits.

8. When will internet filing become mandatory?

This change is effective for taxation years ending after 2009.

9. Is there an additional cost to internet file my T2 Corporation Income Tax return?

There is no cost to internet file. However, software is required and the cost depends on the commercial software used to prepare the T2 return. Because approximately 90% of corporations already use commercial software products to produce their T2 returns, there should be little to no additional cost.

10. What will happen if I am required to internet file my return but I send the CRA a paper return instead?

The CRA will process the paper T2 return through traditional methods, and will apply a penalty for non-compliance.

11. What is the penalty amount, and how is it applied?

The penalty will be implemented gradually for taxation years that end after 2010. If a paper T2 return is filed and processed, and it is determined that the return should have been internet filed, a penalty will be assessed as follows:

*For Taxation Years Ending:**	Penalty (per return)
in 2011	$ 250
in 2012	$ 500
after 2012	$1,000

*There will not be any penalty for taxation years ending in 2010.

12. Does the CRA review internet filed returns differently from paper returns?

No, the CRA applies the same level of verification to all returns whether internet filed or paper filed. It is important that all tax returns contain complete and accurate information.

13. Will I still need to submit paper documents to the CRA?

In specific circumstances, a small number of corporations may be required to submit paper documentation to the CRA. For example, certificates or elections may still need to be submitted in paper format. See Filing the Electronic return for more information on filing elections.

14. Do requests to amend a previously filed return also need to be internet filed?

No, at this time, requests to amend a previously filed return must be filed by paper.

15. Where can I get more information about filing my corporation income tax return over the internet?

Visit the CRA's Corporation Internet Filing page.