Tax & Trade Blog
Can’t File with CRA! Changes to Annual Returns in Ontario
Despite its shaky initial rollout, the new Ontario Business Registry (“OBR”) looks like it is here to stay. Companies incorporated or doing business in Ontario (or indeed looking to potentially expand into the province) need to be aware of the substantial changes the new system brings.
This blog post will focus on changes to the process of filing annual returns in Ontario. Readers are reminded that the information provided is of a general nature and are advised to seek advice for their own particular situation, including regarding changes beyond the annual returns process.
The new OBR seeks to simplify doing business in Ontario by allowing filings to be done directly with the Government of Ontario, 24 hours a day, 365 days per year. The OBR system allows for a wide variety of transactions, including incorporating an Ontario corporation, applying for a licence under the Extra-Provincial Corporations Act, filing returns, registering business names, filing limited partnership declarations, and more.
Companies should be aware that pre-existing registry data has been rolled over and is now accessible online (although a public search will produce only basic corporate information). No information filed under the previous system needs to be re-submitted, although now would be a great time to ensure that the information appearing in the OBR is correct and up-to-date!
Per the Corporations Information Act, businesses and non-profits incorporated in Ontario, as well as foreign corporations that have a license endorsed under the Extra-Provincial Corporations Act, need to file a corporate return each year. Previously, this return could be included when filing the corporation’s T2 income tax return – but as of May 15, 2021 these filings are no longer be accepted/forwarded by the CRA.
Instead, from October 19, 2021 forward, corporations have to file their annual return with the Ontario government (either through the OBR or using an authorized third-party provider). Notably, despite the change in procedure, the timeline for filing remains defined by the Income Tax Act. This means that businesses will now have to use two different processes (one for income tax and one for corporate filing), although keeping the same timeline for both should hopefully minimize the possibility of missed deadlines.
The Grace Period
This leaves the question of what happens to corporations whose filings were due between May 15, 2021 and October 19, 2021. Having recognized the problem of the old system being gone before the new one was in place, the Ontario government relieved corporations from the annual filing requirement if their annual return had to be delivered during the gap. It is not clear from the language of the transition regulation whether this means that corporations only benefit from this exception if their tax return was due during the time period in question (i.e., if the six-months-post-corporate-year-end period expired between May 15 and October 19). Regardless, companies would do well to consider whether a “better late than never” approach to filing their returns would be best, given the potential consequences of missing a return altogether.
Though there are growing pains with the new system, businesses will need to adjust to the new reality. Going forward, Ontario and certain extra-provincial corporations will be required to make an additional filing with the Ontario government.
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