The Complete Guide to Responding to a CRA Demand to File
What a demand to file is, the deadline it sets, what happens if it is ignored, and how an arbitrary assessment is displaced by filing. Nil T2 filing is $300.00 plus HST per tax year.
Written and reviewed by Sharad Gondaliya, CPA (Ontario), CPA Ontario Membership 61040184.
Last reviewed: October 22, 2026 · All nil T2 filing guides
On this page
- What a Demand to File Is
- Why It Arrived
- Reading the Letter
- A Nil Year Still Answers the Demand
- What Happens if It Is Ignored
- How an Arbitrary Assessment Works
- Displacing an Arbitrary Assessment
- Where the Demand Names Several Years
- Checking the Year Really Was Nil
- The Accounts a T2 Does Not Close
- After the Return Is Transmitted
- What the Fee Covers
Gondaliya CPA Professional Corporation is a registered EFILE electronic filer. Returns are prepared and transmitted in Canada. Credentials are never shared and never used offshore.
What a Demand to File Is
A written requirement from the Canada Revenue Agency that a named return be filed by a named date. It is not a reminder and it is not an assessment. It is a legal obligation with its own deadline, separate from the original filing deadline the return already missed.
A demand is usually the first contact a dormant corporation receives. Nothing has gone to collections at this point, and the position is still straightforward to resolve.
Why It Arrived
Because the Canada Revenue Agency holds a record showing the corporation exists and a tax year for which no return was received. Incorporation created that record, and it persists whether or not the corporation ever traded.
| Trigger | What the Agency sees |
|---|---|
| Incorporated and never traded | An open tax year with no return |
| Stopped trading, kept the corporation | A gap after the last return filed |
| An open RC account | A filing obligation on the account |
| A year-end passing with no return | The corporation moving into arrears |
None of the four requires the corporation to have earned anything.
Reading the Letter
Three things on the letter decide what happens next: which tax year or years are named, the date the return is required by, and whether the letter names a specific officer of the corporation.
The named date is the one that matters. A demand answered by that date closes the matter. A demand answered late is treated as a repeated failure, which doubles the percentage penalty rate on any year where tax is owing.
A Nil Year Still Answers the Demand
Filing a nil return satisfies a demand in exactly the way a trading return does. The obligation is to file, not to owe.
A true nil return carries no percentage late-filing penalty, because that penalty is a percentage of tax owing and the corporation owes $0.00. The unfiled year still stays open forever, invites a demand to file and an arbitrary assessment, blocks a clearance certificate and dissolution, and costs a non-resident-owned corporation $25.00 per day up to $2,500.00.
Nil T2 Filing, $300.00 plus HST per tax year
One price for every year and every province. CPA reviewed and transmitted electronically.
What Happens if It Is Ignored
The Canada Revenue Agency proceeds without the corporation. It may assess on its own estimate of income, and in a persistent case may pursue the failure through the courts.
| Stage | What it means |
|---|---|
| Demand issued | A deadline to file is set |
| Demand unanswered | The repeated-failure penalty rate becomes available |
| Arbitrary assessment | A tax debt is raised on an estimate |
| Collection | That debt is pursued like any other |
| Prosecution | Available where the failure persists |
The corporation moves down that table by doing nothing.
How an Arbitrary Assessment Works
The Agency estimates income from whatever it holds, assesses tax on that estimate, and issues a notice. The figure is not a guess the corporation can correct by explaining; it is an assessment that stands until a filed return replaces it.
Interest runs on the assessed balance from the date it is raised. For a corporation that genuinely had no activity, this is how a year that owed $0.00 becomes a debt.
Displacing an Arbitrary Assessment
By filing the actual return for that year. The filed return is assessed on its own figures and supersedes the estimate.
A nil return displaces an arbitrary assessment to $0.00 where the corporation truly had no activity. The sooner it is filed, the less interest has accumulated on the estimate in the meantime.
Where the Demand Names Several Years
Each year named is a separate return on its own form for its own tax year. Five years named is five returns. They are prepared and transmitted together, oldest first.
See whether five years of nil T2 returns can be filed at once.
Checking the Year Really Was Nil
Before filing, the year is tested rather than assumed. A corporation is nil for this service only where it had no activity at all in the tax year.
A holding corporation with investment income, a rental corporation and a corporation that paid or received a dividend are not nil. Those are handled by Gondaliya CPA Professional Corporation at gondaliyacpa.ca at $350.00 plus HST per year.
Share capital, cash, a shareholder loan, an incorporation cost or a bank charge does not stop the year being nil, but it does make GIFI Schedules 100, 125 and 141 required. The detail is in the guide to GIFI Schedules 100, 125 and 141.
The Accounts a T2 Does Not Close
Answering a demand for a T2 settles the corporate income tax obligation and nothing else. An open GST/HST account and an open payroll account each carry their own filing obligations and generate their own demands.
A GST/HST account is closed with Form RC145. Until it is closed or filed nil, it keeps producing letters of its own.
After the Return Is Transmitted
The confirmation of transmission is the record that the demand was answered. It is kept with the corporation’s minute book alongside the assessment that follows.
Where the corporation is being wound up, the clearance certificate is applied for only once every open year has been filed. That order is set out in the guide to the final T2 and dissolution.
What the Fee Covers
The fee is $300.00 plus HST per tax year, covering one nil T2 return for one corporation for one tax year:
| Included | Detail |
|---|---|
| The T2 return | Including the T2 Short where the corporation qualifies |
| GIFI Schedules 100, 125 and 141 | Where they are required |
| Schedule 24 | On a first return |
| Schedule 50 | For every shareholder at 10% or more |
| Schedule 8 and loss continuity | Recorded |
| Form T183CORP package | With single-use secure e-signing |
| CPA review | Before transmission |
| Electronic transmission | By a registered EFILE electronic filer |
| One corrected transmission | If the Agency rejects the first one |
| CRA confirmation | Emailed within 3 business days |
See the full nil T2 filing cost.
Frequently Asked Questions
What Is a CRA Demand to File?
A written requirement from the Canada Revenue Agency that a named return be filed by a named date. It sets its own deadline, separate from the filing deadline the return already missed.
Does Filing a Nil Return Answer a Demand?
Yes. The obligation is to file, not to owe. A nil return satisfies a demand in the same way a trading return does.
What if I Ignore It?
The Canada Revenue Agency may assess the corporation on its own estimate of income. That arbitrary assessment is a collectible debt with interest running on it, and it stands until a filed return displaces it.
Can an Arbitrary Assessment Be Reversed?
It is displaced rather than argued down. Filing the actual return for that year replaces the estimate, and a genuine nil year displaces it to $0.00.
The Demand Names Four Years. Is That Four Returns?
Yes. Each tax year is its own return on its own form. They are prepared and transmitted together, oldest first.
Does Answering the Demand Close My GST/HST Account?
No. A T2 settles the corporate income tax obligation only. An open GST/HST account carries its own filing obligation and is closed with Form RC145.
Questions Answered in Full
- What Happens if I Don’t Respond to a CRA Demand to File a T2?
- What Happens if I Don’t File My T2 for Five Years?
- What Happens if I Don’t File a Nil T2?
- Can I File Five Years of Nil T2 Returns at Once?
- Can I File Nil T2 Returns for a Corporation I Forgot About?
- What Happens if I Don’t Report a Dormant Corporation to the CRA?
The Other Nil T2 Filing Guides
- The Complete Guide to Inactive Holding Company Filing
- The Complete Guide to T2 Schedules on a Nil Return
- The Complete Guide to Shelf Corporation Compliance
- The Complete Guide to T2 Filing Deadlines
- The Complete Guide to Zero-Activity Corporate Tax Returns
- The Complete Guide to Corporate Tax Arrears and Interest
- The Complete Guide to Winding Up an Inactive Corporation
- The Complete Guide to Small Business Corporate Filing
- The Complete Guide to the Corporate Compliance Calendar
- The Complete Guide to Numbered Company Maintenance
- The Complete Guide to Mandatory T2 Electronic Filing
- The Complete Guide to Schedule 50 and Shareholder Reporting
Nil T2 Filing, $300.00 plus HST per tax year
Type your corporation name, pick your unfiled years, pay, and sign Form T183CORP on a secure screen. Your CRA confirmation is emailed within 3 business days.