Page 104

98 /

Federal Income Tax Instalments

Notes
(1) Corporations are required to pay monthly tax instalments during the year if their total taxes

payable, under Parts I (Income Tax), VI (Tax on Capital of Financial Institutions), VI.1 (Tax on

Corporations Paying Dividends on Taxable Preferred Shares) and XIII.1 (Additional Tax on

Authorized Foreign Banks), prior to the deduction of current year refundable tax credits, for

the current or preceding taxation year are more than $3,000. However, eligible Canadian-

controlled private corporations (CCPCs) may pay quarterly tax instalments if certain criteria

are met (see note (3)).

A new corporation is not required to make instalment payments in its first taxation year.
Instalments of tax under Part XII.3 (Tax on Investment Income of Life Insurers) are required

if tax for the current or preceding taxation year is $3,000 or more. All other taxes imposed

on corporations under the Income Tax Act are due on the corporation’s balance-due day.

(2) If the taxation year-end is the last day of the month, instalment payments are due on or

before the last day of each month or each quarter. Otherwise, the first instalment is due

one month/quarter less a day from the first day of the corporation’s taxation year and

subsequent instalments are due on the same day of each of the following months/quarters.

For example, if a corporation had a year ending October 9, 2012, its instalments for its 2013

taxation year are due on the ninth day of each month (e.g., November 9, December 9, etc.)

If the payment due date falls on a Saturday, Sunday or public holiday, the payment is due

by the next business day. Corporations are not required to segregate or identify the type of

tax that is being paid (i.e., Parts I, VI, VI.1 or XIII.1 tax) as all payments are included in one

corporate account.

A final tax payment based on the estimated balance of the tax liability for the year is due

within two months after the end of the taxation year (called the balance due day). Certain

CCPCs have three months in which to make their final tax payment (see the table “Filing

and Payment Deadlines”).

All federal tax instalments and final tax payments must be received by the Receiver General

or processed by a Canadian financial institution on or before the due date. Payments are

not considered received on the postmark date of first-class mail. Payments may possibly be

made electronically over the internet (see www.cra-arc.gc.ca/mkpymnt-eng.html). Late and

deficient instalments are charged interest at the prescribed rate (see the table “Prescribed

Interest Rates”).

Corporations are responsible for determining the amount of instalments needed. The CRA

does not calculate instalment payments for corporations until their tax return has been

assessed.

(3) Eligible CCPCs may pay quarterly tax instalments if the corporation has met all of the

following conditions:

• Taxable income (on an associated basis) for either the current or previous year does not

exceed $500,000

• A small business deduction claim was made in either the current or previous year
• Taxable capital employed in Canada (on an associated basis) does not exceed $10 million

in either the current or previous year.

• Generally no compliance irregularities under the Income Tax Act, Employment Insurance

Act, Canada Pension Plan or GST/HST section of the Excise Tax Act during the preceding

12 months exist.

Type of Corporation

Thresholds

Payment Due Dates

General corporations

$3,000

Monthly

CCPCs

Eligible

Other

3,000
3,000

Quarterly

Monthly

Current as of September 30, 2013