The sixty-second answer
A T2 is due within six months after the corporation's year end, under paragraph 150(1)(a). The tax is due on the balance-due day, which is two months after year end by default and three months for a Canadian-controlled private corporation that claimed the small business deduction and stayed within its business limit in the prior year. So the money is due three or four months before the return that calculates it. Instalments run through the year unless the amounts are $3,000 or less.
A gap of three or four months
For an individual, the filing date and the payment date are usually the same day. For a corporation they never are, and the gap runs the wrong way.
Paragraph 150(1)(a) requires the return within six months after the end of the year [1]. Subparagraph (d)(ii) of the balance-due day definition requires the balance two months after the end of the year [2].
The tax is therefore due four months before the return, or three months before it if the corporation qualifies for the extended balance-due day. There is no version of this where you calculate first and pay afterwards.
That is the single most important thing to understand about corporate deadlines, and it is why a December year end produces a February payment date and a June filing date.
Who has to file at all
Paragraph 150(1)(a) casts a wide net. The return is required where, at any time in the year, the corporation is resident in Canada, carries on business in Canada, has a taxable capital gain otherwise than from an excluded disposition, or disposes of taxable Canadian property otherwise than in an excluded disposition. It is also required where Part I tax is payable for the year, or would be payable but for a tax treaty [1].
Those are alternatives joined by "or". Residence alone triggers the obligation, independently of whether there was any income or any tax. The only corporate exception in section 150 is subsection 150(1.1)(b), for a corporation that was a registered charity throughout the year [1].
The three-month balance-due day, and its three conditions
Subparagraph (d)(i) of the balance-due day definition gives an extra month, and it is conditional on all three of the following being satisfied [2].
Clause (A): a small business deduction was claimed. An amount was deducted under section 125 in computing the corporation's Part I tax payable for the current year or for its preceding taxation year [2]. Either year will do.
Clause (B): CCPC status throughout the year. The corporation is, throughout the current year, a Canadian-controlled private corporation [2]. Throughout means the whole year, so a status change partway through fails this.
Clause (C): within the business limit last year. For an unassociated corporation, prior-year taxable income did not exceed its business limit for that preceding year, measured before specified future tax consequences. Where the corporation is associated, the test is aggregate: the combined taxable incomes of the corporation and its associated corporations, for their last taxation years ending in the preceding calendar year, must not exceed the total of their business limits for those years [2].
The association point is the one that bites unexpectedly. A modest company can lose the extra month because of the income of a sister corporation it shares an owner with.
Instalments
Section 157 requires instalments through the year with the remainder on the balance-due day [3]. Two exceptions and one relaxation are worth knowing.
The small-amounts exception. Subsection 157(2.1) removes the instalment requirement where the relevant taxes or the first instalment base are $3,000 or less [3]. A great many small corporations sit under this and simply pay on the balance-due day.
Quarterly instead of monthly. Subsection 157(1.1) permits quarterly instalments for an eligible corporation, with subsection 157(1.2) setting the conditions [3]. A corporation must be a CCPC with taxable income not exceeding $500,000 and taxable capital not exceeding $10 million, each aggregated across associated corporations, must have deducted an amount under section 125 in the current or preceding year, and must have a clean compliance record for the preceding 12 months.
That compliance condition is broader than it sounds: it covers remittances and returns under the Income Tax Act, under Part IX of the Excise Tax Act, under the Employment Insurance Act, and under the Canada Pension Plan [3]. A late GST/HST return can cost a corporation its quarterly instalment privilege.
Losing it mid-year. Subsection 157(1.5) ends quarterly eligibility during the year where the corporation ceases to qualify, switching it to monthly [3].
What late filing costs
The penalty provisions do not distinguish between individuals and corporations. Subsection 162(1) imposes 5% of the tax payable that was unpaid when the return was required to be filed, plus 1% for each complete month the return is outstanding, capped at 12 months [4].
On a repeat failure following a demand under subsection 150(2), subsection 162(2) doubles both components to 10% and 2%, over a longer 20-month run [4].
Note again that the base is tax unpaid at the filing deadline, which for a corporation is four months after the balance was due. A corporation that paid on its balance-due day and filed late has a small penalty base. A corporation that did neither has a large one.
Why the two-month date is the hard one
Six months to file is, for most small corporations, comfortable. Two months to pay is not, because paying correctly requires knowing the year's profit, and two months after year end is usually before the books are closed.
The result is a recurring pattern: the corporation pays an estimate in month two, files the real return in month six, and discovers a shortfall that has been accruing interest for four months. Or it overpays and lends the CRA money for half a year.
Both outcomes come from the same root cause, which is that the year-end figures did not exist when the payment decision had to be made.
That is the problem MapleTax is arranged around. Because expenses are captured and GIFI-coded in MapleExpense through the year and revenue is recorded as MapleInvoice issues it, a close-to-final profit figure exists at year end rather than four months later. The balance-due day payment is then based on the same numbers the return will eventually carry, and the six-month filing window is used for review instead of for construction.