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Canadian Corporate Tax for Non-Resident Companies

February 6, 2018

Tax Question:

My non-resident company has no activity in Canada. Do I still need to file a Canadian corporate tax return?


Non-resident corporations that have no activity in Canada during their fiscal year are not required to file a Canadian corporate tax return. However, without filing a Canadian corporate tax return, the Canada Revenue Agency (CRA) will not know that you did not have activity in Canada. Therefore, CRA may send you a letter requesting that a return is required to be filed.


If CRA requests that a return be filed, even though your company had no activity in Canada, you may be tempted to file a return in order to be in compliance. However, if you file a tax return later than six months past your fiscal year-end, CRA will assess you a non-resident corporation late filing penalty even if no taxes are owing. The penalty for failing to file on time is the greater of $100 or $25 per day that the return is late up to a maximum penalty of $2,500. Instead of incurring a late filing penalty, a letter can be sent stating that there is no activity in Canada for the requested tax year. The letter is sent to CRA’s International Tax Services Office and should include the following:

  • Company name.
  • Canadian business number of the company.
  • Relating tax year.
  • State that you are a non-Canadian corporation with no permanent establishment in Canada.
  • State that you had no activity in Canada for the requested tax year and therefore, are not required to file a Canadian corporate income tax return for the requested tax year.
  • Have an individual with proper authority for the company sign the letter.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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