Returns Have to Be Filed Even if There is No Activity

Canada Revenue Agency continues to improve their data analytics. In my practice we are hearing from people who have not filed corporate returns for inactive companies and CRA is requesting all those back returns be filed.

We currently have a number of trust returns where there has been no activity and CRA has caught up with those ones as well. The tax laws generally say that you have to file a tax return every year, even if you don’t have any amount owing. The conventional wisdom had been that if you stopped paying your annual dues to Joint Stocks, you would be struck off the register and then you could stop filing returns. CRA has said that they will continue to request returns until the corporation is dissolved – which is a different thing than being struck off the register.

Lately we have been seeing more corporations going the route of being legally wound up and receiving a certificate of surrender. Once you have that document you file a return up to the date on the certificate of surrender and your tax filing obligations are ended. Obviously you will need legal advice to decide if you want to continue to file returns with CRA or if you are going to take the steps necessary to obtain a certificate of surrender.

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