Corporation Nil Filing for $300 Only

Accounts

The Complete Guide to CRA Accounts on a Dormant Corporation

A business number carries separate accounts, and each one keeps its own obligations until it is closed. What a dormant corporation still owes, and how to end it. Nil T2 filing is $300.00 plus HST per tax year.

Written and reviewed by Sharad Gondaliya, CPA (Ontario), CPA Ontario Membership 61040184.

A Business Number Is Not One Account

A corporation has one business number, and that number carries separate program accounts. The corporate income tax account is the one everybody knows about, because it is the one the T2 is filed against. It is rarely the one that causes trouble.

A corporation that ever had staff has a payroll account. One that ever registered for GST/HST has a GST/HST account. Each was opened for a reason, and each stays open until somebody closes it, whatever happened to the reason.

Account Opened because What it expects How it ends
Corporate income tax The corporation exists A T2 return for every tax year It ends with the corporation
Payroll Someone was going to be paid Remittances through the year and an annual T4 information return Form RC145
GST/HST The corporation registered A GST/HST return for every reporting period Form RC145

The business number status checker works through which of them a given corporation is likely to have open.

The Obligation Follows the Account, Not the Activity

This is the sentence that explains almost every unpleasant surprise a dormant corporation gets. The Canada Revenue Agency expects a return on an open account because the account is open. It does not wait to see whether anything happened first.

So a corporation that stopped trading four years ago, paid nobody and sold nothing, still has returns falling due on every account nobody closed. Each one is a separate filing with its own deadline, and none of them is the T2.

Being dormant is not a status you register. There is no form that tells the Agency a corporation has gone quiet and no notification that pauses an account. Nothing happens until an account is closed, and until then the dates keep arriving.

The guide to dormant and inactive corporations covers what being dormant does and does not change.

The GST/HST Account: Nil Returns Until It Is Closed

An open GST/HST account expects a return for every reporting period, and a period with no sales and no tax collected is reported as a nil return rather than skipped. The return is what the account expects; having nothing to report changes the figures on it, not whether it is filed.

That catches people out twice. Once because they assume no activity means no return, and again because the reporting period is often quarterly or monthly, so a single forgotten account generates four or twelve outstanding returns a year rather than one.

The GST/HST nil filing checker tests whether an account is in that position, and the GST/HST account closure checker covers ending it.

The Payroll Account: Remittances and an Annual T4

An open payroll account expects two separate things, which is why it is the account most often underestimated. Through the year it expects remittances, including nil ones where nobody was paid. After the calendar year it expects a T4 information return.

The T4 deadline is the one that surprises accountants as well as owners, because it does not derive from the fiscal year-end at all. It reports a calendar year and is due at the end of the following February, whatever year-end the corporation uses.

What the payroll account expects Measured from Due
Remittances, including nil ones Each remittance period For as long as the account is open
The T4 information return The calendar year The end of the following February

So a corporation with a June 30 year-end has a T2 date in December and a T4 date at the end of February, four months apart, neither derived from the other. The T4 nil filing requirement checker gives the date, and the payroll nil remittance checker covers the remittances.

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Form RC145 Closes Both of Them

One form closes a payroll account and the same form closes a GST/HST account. It is the only thing that ends the obligations on either: not inactivity, not telling an accountant, not letting the returns lapse.

Until the account is closed, nil returns and nil remittances remain due on it, and they accumulate exactly as an unfiled T2 does. A closure is also not retroactive in the way people hope. Closing an account today does not file the returns that fell due on it while it was open, and it does not clear what was owed on it.

This is why the order matters, and the order is the outstanding returns first, then the closure. A closure stacked on top of unfiled periods leaves the unfiled periods exactly where they were.

Why These Two Accounts Reach the Directors

The corporate income tax account is the corporation’s own liability. The other two are not, and that distinction is the practical reason an unused payroll or GST/HST account is worth closing rather than ignoring.

Payroll source deductions are money withheld from someone’s pay. Net GST/HST is money collected from customers. Neither was ever the corporation’s to keep, and amounts of that kind can be assessed against a corporation’s directors personally. Corporate income tax, on its own, cannot.

Amount Whose money it was Can be assessed against a director
Payroll source deductions Withheld from someone’s pay Yes
Net GST/HST Collected from customers Yes
Corporate income tax The corporation’s own liability No, not on its own

A dormant corporation rarely owes corporate income tax, because a nil year assesses at $0.00. What it may have is an open account generating exactly the amounts that do reach a director. The director liability exposure checker sorts which is which.

The Corporate Income Tax Account Is Different

There is no form that closes it while the corporation exists, and nothing to close: the account is the corporation’s relationship with the Agency for income tax, and it ends when the corporation does.

So the T2 is not something that can be switched off for a quiet year. Every tax year gets a return until the corporation is dissolved, and a year with no activity gets one reporting $0.00 rather than no return at all.

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.

The complete guide to the nil T2 return is the pillar for that side of it.

The Order to Deal With Them In

The sequence is not arbitrary, because each step rests on the one before it. Returns first, because a closure does not file anything. Closures next, because they stop the dates recurring. Anything to do with dissolution last, because it rests on a complete filing record.

Order Step Why it sits here
1 File every outstanding T2 return, oldest first Each year opens from the closing balances of the one before it
2 File the outstanding GST/HST and payroll returns A closure does not file what fell due while the account was open
3 Close the payroll account with Form RC145 Ends the remittances and the annual T4
4 Close the GST/HST account with Form RC145 Ends the reporting periods
5 The final T2, clearance and the registry filing Only where the corporation is being wound up

The CRA account closure sequencer produces this list for a particular corporation, naming which steps apply and which sit outside the fee.

What Has to Be Closed Before a Dissolution

A corporation cannot be cleanly wound up with accounts still open and returns still outstanding. The clearance certificate is the step that makes this concrete: the request rests on a complete filing record, so an outstanding GST/HST or payroll period blocks it as surely as an unfiled T2.

Dissolving anyway does not solve it. A corporation dissolved with unfiled years leaves those years open behind it, and the registry dissolution settles nothing on the tax side.

The guide to winding up an inactive corporation sets out the whole sequence, and the dissolution readiness checker tests whether a corporation is ready for the last step.

What Sits Outside the Fee, Said Plainly

The fee of $300.00 plus HST per tax year covers one nil T2 return for one corporation for one tax year. It is worth being direct about what that does not include, because the accounts on this page are the commonest place the boundary gets found the hard way.

Item Covered by the fee
A nil T2 return for a tax year Yes
A GST/HST return, nil or otherwise No
A payroll remittance, nil or otherwise No
The T4 information return No
Closing an account with Form RC145 No
The registry annual return No
A clearance certificate request No

Where any of those are needed, they are handled by Gondaliya CPA Professional Corporation at gondaliyacpa.ca rather than priced here. The full boundary is on the nil T2 filing cost page.

The Four Mistakes Worth Avoiding

Each of these is common enough to be worth naming, and each one costs more to undo than to avoid.

The mistake What it actually does
Assuming no activity means no return The obligation follows the open account, so the returns fall due anyway and accumulate
Closing an account to deal with the outstanding returns A closure files nothing. The outstanding periods stay outstanding
Reading the T4 deadline off the fiscal year-end The T4 reports a calendar year and is due at the end of the following February, which can be months away from the T2 date
Dissolving with accounts still open The tax years stay open behind the dissolution, and a clearance certificate is blocked until they are filed

The thread running through all four is the same: an account is a standing obligation, and only a closure ends it. The guide to the corporate compliance calendar sets out the dates each open account generates.

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

Does a dormant corporation still have to file GST/HST returns?

While the account is open, yes. A period with no sales is reported as a nil return rather than skipped, because the obligation follows the open account rather than the activity.

Do I have to make payroll remittances if nobody was paid?

While the payroll account is open the Agency expects the remittances, including nil ones, and a T4 information return after each calendar year. Form RC145 closes the account and ends both.

How do I close a GST/HST or payroll account?

With Form RC145, which closes either one. Closing it does not file the returns that fell due while it was open, so the outstanding returns come first.

Which of these can be assessed against me personally?

Payroll source deductions and net GST/HST can be assessed against directors personally, because neither was ever the corporation’s money. Corporate income tax, on its own, cannot.

Is any of this covered by the nil T2 fee?

The nil T2 return is. The GST/HST returns, the payroll remittances, the T4 return and the account closures all sit outside the fee of $300.00 plus HST per tax year.

Can I dissolve the corporation instead of dealing with these?

Not cleanly. A clearance certificate request rests on a complete filing record, so an outstanding period blocks it, and dissolving anyway leaves the tax years open behind the corporation.

Questions Answered in Full

The Other Nil T2 Filing Guides

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