A sole proprietor pays taxes by reporting income (or loss) on a T1 income tax and benefit return. You will need to file a T1 so that you can pay income tax for the year, want to make CPP and EI contributions and if you disposed of a capital property.
All resident corporations (except tax-exempt corporations need to file a corporation income tax (T2) return every tax year even if there is no tax payable. This includes:
- non-profit organizations
- tax-exempt corporations
- inactive corporations
