Canadian income tax is based on the self-assessment system. This means that the obligation of calculating taxable income and taxes payable and of paying taxes is that of the taxpayer and not the CRA.
You must file returns in a prescribed form containing prescribed information. The date by which the returns must be filed:
| Income tax return | Filing date |
| Corporations | 6 months after the end of the taxation year |
| Individuals | On or before April 30th |
| Individuals, who on a business | On or before June 15th |
| Trusts or estates | 90 days |
Requirements to file a return
While corporations that carry on business in Canada must file a tax return for each taxation year, individuals are only required to file if one of the following applies:
- a balance of tax is owing for the year;
- a capital property has been disposed of in the year;
- a non-resident individual has a taxable capital gain (e.g., claimed a capital gains reserve in the previous year);
- the individual’s Home Buyer Plan (HBP) balance or Lifelong Learning Plan (LLP) is a positive amount; or
- a return is demanded by the Minister.
Remember, individuals entitled to a refund due to over-withholding or refundable tax credits should file in any case. Low-income taxpayers should file to receive income-based benefits such as the GST credit, the Canada Child Tax Benefit (‘‘CCTB’’) and the Guaranteed Income Supplement (‘‘GIS’’). If you do not file a tax return, you are not eligible to receive these amounts.
Books and Records
You are required to keep adequate books and records. The records must be sufficient to support a determination of your income subject to tax. The minimum required implies basic transaction data, including invoices, receipts, contracts, bank statements and canceled cheques. Electronic images of this data are acceptable as a method of keeping records.
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