Tax returns for public companies in Canada
The T2 return, instalments and year-end tax provision for Canadian public companies listed on the TSX Venture Exchange, the CSE and similar markets. EverStone is a CPA firm; we prepare the return and the tax numbers your auditor reviews, working alongside your audit rather than instead of it. Updated .
Quick answer: a public company files the same T2 corporate tax return as any Canadian corporation, but it is never a CCPC. That means no small business deduction, every dollar of income taxed at the general rate, instalments paid monthly and the balance due two months after year-end. EverStone prepares the T2, the provincial schedules and the IAS 12 income tax provision for listed issuers across Canada, from $1,800 per return for a single listed company, fixed in writing after a free consultation.
What is included
- The T2 return and its schedules, including Schedule 1 reconciling accounting income to taxable income, the CCA schedule and the provincial schedules, filed electronically.
- The income tax provision under IAS 12: current tax, deferred tax and the rate reconciliation note, prepared in the form your auditor expects to test.
- Monthly instalments calculated for the coming year, with a schedule your finance team can pay from.
- Eligible dividend support: the low rate income pool (LRIP) check and the designation notice to shareholders.
- Information returns that listed issuers often need, such as the T106 for transactions with non-arm’s-length non-residents and the T1134 for foreign affiliates.
- A written summary for the CFO and audit committee: what the year showed, the positions taken and what changes next year.
Why a listed company’s return is different
A private company owned by Canadians is usually a Canadian-controlled private corporation, and most of the tax planning written for small business assumes that status. A public corporation cannot be a CCPC. The consequences run through the whole return.
No small business deduction. All active business income is taxed at the general rate: 15% federal plus the provincial general rate, which is 12% in British Columbia (27% combined), 11.5% in Ontario (26.5%) and 8% in Alberta (23%). The B.C. rates and Ontario rates pages set out the rest.
Earlier payment. The T2 is still due six months after year-end, but the balance owing is due two months after it, not three. Instalments are monthly; the quarterly option is only for small CCPCs.
Different dividend pools. A CCPC tracks its general rate income pool; a public company tracks its LRIP instead. Dividends paid while an LRIP balance exists cannot be designated eligible, which matters to every shareholder who expects the enhanced dividend tax credit.
Smaller research credits. SR&ED claims on the T661 still earn an investment tax credit, but at 15% and non-refundable, so it reduces tax payable rather than coming back as cash.
How the year-end runs alongside the audit
For a listed issuer the tax work has two deadlines that do not line up: the securities deadline for the audited annual statements (120 days after year-end for a venture issuer, 90 days for others) and the CRA’s six-month deadline for the T2. The provision has to be ready for the first; the return follows it.
- Planning meeting before year-end. We agree the timetable with the CFO and the auditor, and list the unusual items of the year: financings, acquisitions, option grants, debt settlements.
- Draft tax provision. Current and deferred tax, the rate reconciliation and the deferred tax asset position, with support for any losses carried forward.
- Auditor review. We answer the audit team’s questions on the provision directly, so your finance staff are not the go-between.
- Balance due paid. Any tax owing is paid within two months of year-end, before the return is filed, so no arrears interest runs.
- The T2 and schedules. Prepared from the audited statements and filed electronically within six months.
- Instalments reset. The monthly instalment schedule for the next year is recalculated from the filed return.
Fees depend on the number of entities, subsidiaries outside Canada and how many unusual transactions the year had. They are quoted in writing after a free consultation; our published fees show how the rest of our work is priced.
Tax issues that come up on venture and small-cap issuers
Reverse takeovers and changes of control. Many venture listings happen through a reverse takeover or a qualifying transaction. An acquisition of control triggers a deemed year-end and restricts non-capital losses to the same or a similar business. The deemed year-end is a full T2 filing of its own, and it is easy to miss in the rush of the listing.
Share issue costs. Legal, underwriting and listing costs of raising equity are not expensed in the year; they are deducted over five years. They sit on Schedule 1 and in the deferred tax note until they are used.
Stock options. The IFRS 2 expense for options settled in shares is added back on Schedule 1; the corporation generally gets no deduction when options are exercised from treasury. The deferred tax note has to show that the expense creates no tax asset.
Flow-through shares. Mining and energy issuers that renounce exploration expenses to investors file the T101 forms, and a renunciation under the look-back rule brings Part XII.6 tax if the money is not spent in time. We track the spending against the deadline through the year.
Losses and the deferred tax asset. Pre-revenue issuers carry large non-capital losses. Whether the deferred tax asset is recognised is an accounting judgement the auditor will test; the loss schedule on the T2 is the evidence behind it.
Who this is for, and who it is not
A good fit: a listed company on the TSX Venture Exchange or the CSE, or a small-cap on the TSX, with a lean finance team, one Canadian operating entity or a few subsidiaries, and an auditor who needs a clean, documented tax provision on time. Resource, technology and life-sciences issuers are typical.
Not a fit: a large multinational group that needs a transfer pricing study in several countries or a full tax department. We are a single-CPA firm and we would rather tell you so on the first call. We also do not audit your financial statements; an audit of a reporting issuer is done by a firm registered with the Canadian Public Accountability Board, and our work is prepared for that firm to review.
If your company is private and owner-managed, the T2 corporate tax return page is the one written for you.
Common questions about public company tax returns
Can a public company ever be a CCPC?+
When is corporate tax due for a public company?+
Do you prepare the IAS 12 tax provision?+
Can you work with our existing auditor?+
Are dividends from a public company eligible dividends?+
We are pre-revenue. Do we still file a T2?+
The forms and the dates
The core filing is the T2 with Schedule 1, the capital cost allowance schedule, the loss schedules and the provincial schedule for each province with a permanent establishment. Alberta and Quebec administer their own corporate returns. Listed issuers with foreign dealings add the T106 and the T1134; flow-through issuers add the T101 series; research-intensive issuers add the T661 and Schedule 31. The dates: instalments monthly, the balance two months after year-end, the return six months after it. The CRA’s own guide is the T2 Corporation Income Tax Guide.
Where we work from
EverStone is based in Abbotsford, B.C., and serves listed companies across Canada remotely: documents move through secure upload, meetings are by video, and engagement letters are signed electronically. British Columbia has many venture issuers, particularly in resources and technology, and the provincial layer of the return is the same work wherever the head office sits. The Vancouver and Toronto pages cover the rest of our work in those markets.
What sets the fee
Public company tax returns start from $1,800 per return for one listed company: the T2, its schedules and the IAS 12 provision. A group, or a year with more going on, is quoted above that, per engagement, in writing, before any work starts. What moves it: how many corporations are in the group and where they are, whether the year had a financing, acquisition or change of control, whether flow-through shares or SR&ED are involved, and how far the working papers are prepared when they reach us. A free consultation is enough to scope it.
Other corporate tax work
The rest of what this covers, and the page each one is on.
Talk to a CPA about this
One Chartered Professional Accountant, start to finish. Fixed fees, quoted in writing before any work begins, and no obligation from a first conversation.
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