Canada Revenue Agency
Symbol of the Government of Canada
Skip to content | Skip to institutional links

Common menu bar links

 

Institutional links

What's new?

On this page...

Is this guide for you?

In this guide, we give you basic information on how to complete the T2 Corporation Income Tax Return. This return is used to calculate federal income tax and credits. Corporations that have a permanent establishment in any province or territory other than Quebec or Alberta also use this return to report provincial and/or territorial income taxes and credits. Corporations with a permanent establishment in Quebec or Alberta must file a separate provincial return.

What's new?

Fall update

On December 16, 2011, the Minister of Finance announced an extension of time to file corporate partnership alignment elections. Late alignment elections will be considered as having been filed on time if the election is filed on or before January 31, 2012. See Partnerships – Elimination of corporation tax deferral.

Online services built for businesses

We have added new and enhanced online services to give you more control of your business tax accounts. You can now :

  • transfer payments between programs accounts (for example, from corporation to GST/HST) within the same nine‑digit business number; and
  • request that we stop issuing remittance vouchers that accompany notices and statements.

To use these online services, go to:

North American Industry Classification System (NAICS) codes

Since November 2011, all certified tax preparation software for T2 returns use self identified North American Industry Classification System (NAICS) codes. As a result, corporations no longer need to fill out lines 281, 282 and 283, which were removed from the 2011 T2 return. See North American Industry Classification System (NAICS) codes.

2011 federal, provincial, and territorial budgets

New items such as changes introduced in the 2011 federal and various provincial/territorial budgets are outlined in colour in this guide. This guide may contain changes that had not yet become law at the time of printing.

Partnerships - Elimination of corporation tax deferral

A corporation that has a significant interest in a partnership with a fiscal period different from the corporation’s tax year will no longer be able to defer tax. This rule may also affect other corporations if the fiscal period (of the partnership they are a member of) is changed. See Partnerships - Elimination of corporation tax deferral.

Stop-loss rule on the redemption of a share

This stop-loss rule is extended for shares disposed of after March 21, 2011. See Part 1- Shares for dispositions of shares.

Capital cost allowance (CCA)

Accelerated CCA for Clean Energy Generation - For eligible assets acquired after March 21, 2011, that have not been used or acquired for use before March 22, 2011, Class 43.2 is amended to include equipment used by the taxpayer, or by a lessee of the taxpayer, to generate electrical energy in a process in which all or substantially all of the energy input is from waste heat. See Accelerated CCA for clean energy generation.

Accelerated CCA for Manufacturing and Processing Sector - Eligible machinery and equipment acquired by the taxpayer in 2012 or 2013, will continue to be included in Class 29 and eligible for a 50% straight‑line CCA rate. See Accelerated CCA for the manufacturing and processing sector.

Oil sands - Canadian exploration expense (CEE) and Canadian development expense (CDE)

Oil sands and shale resource properties - For acquisitions made after March 21, 2011, the cost of acquiring oil sands leases, and other oil sands or shale resource property, is treated as Canadian oil and gas property expense (COGPE), which is deductible at 10% per year on a declining balance basis, instead of being treated as CDE, which is deductible at 30% per year on a declining basis.

Pre-production development expenses of oil sands or shale mines - The development expenses incurred to bring a new oil sands or shale mine into production in reasonable commercial quantities are to be treated as CDE, which is deductible at 30% per year on a declining balance basis. The change applies for expenses incurred after March 21, 2011, and will be phased-in until 2016. These expenses were previously treated as CEE, which is deductible at 100% in the year incurred. This last treatment will be maintained for expenses incurred before 2015 for new mines on which major construction began before March 22, 2011.

Federal qualifying environmental trust tax credit

The definition of qualifying environmental trust tax credit is extended for 2012 and later tax years. See Line 648 - Federal qualifying environmental trust (QET) tax credit.

Nova Scotia small business income tax rate

Effective January 1, 2012, the small business income tax rate will be reduced from 4.5% to 4%. This rate will be pro‑rated for tax years that straddle January 1, 2012. See Nova Scotia.

Nova Scotia film industry tax credit

For principal photography starting on or after December 1, 2010, the province removes the total production cost cap. Residency requirements for this credit are also changed beginning on December 1, 2010. See Nova Scotia film industry tax credit.

Nova Scotia digital media tax credit

Beginning on December 1, 2010, the residency requirements for this credit are changed. See Nova Scotia digital media tax credit.

New Brunswick income tax rates

Effective July 1, 2011, the higher income tax rate is reduced to 10%. The reduction of this rate formerly planned for July 1, 2012, is cancelled. Effective January 1, 2012, the small business income tax rate is reduced from 5% to 4.5%. This rate is pro‑rated for tax years that straddle these dates. See New Brunswick.

New Brunswick film tax credit

The New Brunswick film tax credit will be phased out starting April 6, 2011. See New Brunswick film tax credit.

Ontario Media Development Corporation (OMDC) application

Effective April 1, 2011, online application for the OMDC is mandatory. See OMDC application form starting at Ontario computer animation and special effects tax credit, up to and including Ontario book publishing tax credit.

Ontario book publishing tax credit

Qualifying expenditures incurred after March 29, 2011, include the marketing expenditures incurred 12 months before to 12 months after the literary work is published. See Ontario book publishing tax credit.

Manitoba manufacturing investment tax credit

This credit is extended to December 31, 2014. A corporation can renounce, in whole or in part, the manufacturing investment tax credit. See Manitoba manufacturing investment tax credit.

Manitoba co-op education and apprenticeship tax credit

The components of the credit that were scheduled to expire on December 31, 2011 (the co-op student hiring incentive, the co-op graduate hiring incentive and the advanced‑level apprentice hiring incentive), are extended to December 31, 2014. See Manitoba co-op education and apprenticeship tax credit

Manitoba odour‑control tax credit

This credit is extended to December 31, 2014. A corporation can renounce, in whole or in part, the odour‑control tax credit. See Manitoba odour‑control tax credit.

Manitoba “Neighbourhoods Alive!” tax credit

Effective April 13, 2011, corporations that make financial donations and provide an eligible service contribution to help charitable organizations set up eligible social enterprises in Manitoba can claim a 30% non‑refundable tax credit of up to $15,000 a year, on top of their charitable donation deduction. See Manitoba "Neighbourhoods Alive!" tax credit.

Manitoba cultural industries printing tax credit

This is a new refundable tax credit for Manitoba printers equal to 15% of eligible printing costs incurred and paid after April 12, 2011, and before 2016 to produce eligible books. See Manitoba cultural industries printing tax credit.

Manitoba book publishing tax credit

This credit is extended to December 31, 2014. It is also expanded to include non-refundable monetary advances and labour costs related to publishing an electronic version of an eligible literary work, for eligible expenses incurred and paid after April 12, 2011. Also, the bonus applied to Manitoba printing costs when an eligible book is printed on paper with a minimum of 30% recycled content is increased from 10% to 15%, for printing costs incurred and paid by a publisher after April 12, 2011. See Manitoba book publishing tax credit.

Manitoba green energy equipment tax credit

For installations after April 12, 2011, the tax credit for Manitoba manufacturers of qualifying geothermal heat pumps is increased from 5% to 7.5%. The credit for Manitoba manufacturers is also expanded to include a credit for green energy transmission equipment. The tax credit for purchasers of qualifying made‑in‑Manitoba geothermal heat pumps installed in Manitoba is also increased from 5% to 7.5%. The tax credit applicable to other eligible installation costs for geothermal heating systems installed in Manitoba is increased from 10% to 15%. See Manitoba green energy equipment tax credit.

Saskatchewan small business income tax rate

The small business income tax rate is reduced from 4.5% to 2% effective July 1, 2011. See Saskatchewan.

Previous page: Table of Contents  Previous page | Table of contents | Next page  Next page: Before you start

Date Modified: 2012-01-27

Top of Page
Important Notices