Nil Return Late Penalty Checker
Three questions that set out what applies to a late nil T2: why the percentage penalty has nothing to apply to, and what still follows from leaving the year unfiled.
Written and reviewed by Sharad Gondaliya, CPA (Ontario), CPA Ontario Membership 61040184.
Last reviewed: October 27, 2026
Answer all three and the position appears here.
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.
Why the Percentage Has Nothing to Apply To
The late-filing penalty on a T2 is a percentage of the tax owing. That is the mechanism, and it is the whole reason a nil year behaves differently from a year with a balance: a percentage of $0.00 is $0.00.
That is the first half of the position and not the whole of it. What follows is the whole of it, and the second half is the half that matters once a year has been sitting unfiled for a while.
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.
What an Unfiled Year Does Instead
The consequences of a late nil year are not financial at first. They are that the year stays open and keeps being a year that is open.
An open year invites a demand to file, and a demand opens the way to an arbitrary assessment, in which the Canada Revenue Agency assesses a figure of its own rather than waiting for the return. It blocks a clearance certificate, which blocks dissolution. None of that resolves itself with time.
The One Charge That Does Not Depend on Tax Owing
A non-resident-owned corporation is charged $25.00 per day for an unfiled return, up to $2,500.00. That charge runs on the lateness itself, so a nil year with no tax owing accrues it exactly as a year with a balance would, and it reaches its ceiling after 100 days.
The non-resident T2 penalty calculator works that figure out from the dates.
A Nil Year and a Year With Tax Owing, Side by Side
The difference is not in the form, the deadline or the fee. It is in whether there is a figure for a percentage to apply to.
| What follows from filing late | A true nil year | A year with tax owing |
|---|---|---|
| Percentage late-filing penalty | Nothing for the percentage to apply to, because the corporation owes $0.00 | Applies to the tax owing |
| The year stays open | Yes | Yes |
| Invites a demand to file | Yes | Yes |
| Opens the way to an arbitrary assessment | Yes | Yes |
| Blocks a clearance certificate and dissolution | Yes | Yes |
| $25.00 per day up to $2,500.00 where non-resident-owned | Yes | Yes |
| Cost of the return itself | $300.00 plus HST per tax year | Not a nil return, so not this fee |
Of the six rows describing what follows from filing late, five are identical down both columns. The percentage is the only consequence on which a nil year sits anywhere different, and it is the one people remember as though it were the whole list. The last row is not a consequence at all, it is the fee.
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.
Frequently Asked Questions
Is a Late Nil Return Free of Consequences?
No. 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.
Does the Fee Go Up Because the Year Is Late?
No. A late nil year is $300.00 plus HST per tax year, the same as one filed on time.
How Long Does the Non-Resident Charge Keep Running?
It accrues at $25.00 per day up to a ceiling of $2,500.00, which it reaches after 100 days.
What Changes Once a Demand to File Arrives?
The demand sets its own deadline, stated on the letter, and it opens the way to an arbitrary assessment. The guide to responding to a demand to file sets out what to do in what order.
What If the Year Turns Out Not to Have Been Nil?
Then the percentage has a figure to apply to and this is not the right tool. 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.
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.
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