What you need to know about Ontario Corporate Tax Harmonization

If you own a corporation which is liable to pay Ontario corporate income and capital taxes,you may have heard of plans to combine the Ontario corporate tax return (Form CT23) with the federal corporate tax return (Form T2).This change has been widely lauded by the business community as it will reduce the tax compliance burden on Ontario corporations and will also result in the government being more efficient in administering corporate taxes.

When Does Harmonization Occur?

Your corporation will no longer have to file a separate Form CT23 for taxation years that end after 2008. Therefore, if your corporation has a December 3131st year-end, the first year you will be impacted is the year ending December 31, 2009. However, corporations with non-calendar year-ends will be impacted sooner – for example, if your corporation has a January 31st year-end, you will file your first combined corporate tax return for the taxation year which ends on January 31, 2009.
The move to a harmonized corporate tax system for Ontario companies is a move in the right direction to help reduce the compliance burden on corporations. However, it's important that you understand how the transition will impact your corporation.

For more information how this change will impact you contact our office  at 416-622-1221