Mandatory Internet Filing For Business

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Personally – I think this really sucks … If your revenues exceed $1,000,000 then you are forced to E-File corporation tax returns or be penalized. Sure, I can see the greater good in quicker notice of assessments and accuracy and environmental concerns, and will comply with my own clients – but not happy with this.

The following is now available on the CRA Web site:

Fact Sheet

Mandatory Internet filing is a new filing requirement that applies to certain corporations with annual gross revenues that exceed $1 million and information return filers who file over 50 information slips.

Mandatory Internet filing was proposed in the federal government’s 2009 budget and is intended to increase the efficiency of government while improving service and value to taxpayers.

These new filing requirements will increase the use of the Internet for filing T2 corporation income tax returns and information slips. It will also further streamline the Canada Revenue Agency’s (CRA) services, lower costs and reduce paper waste.

Internet filing is a fast, secure and easy filing option. It helps to eliminate delays and traditional delivery expenses, while reducing printing costs, and providing filers with immediate confirmation of filing.

With increased filing by Internet, the administrative burden on the CRA is reduced, allowing the Agency to commit more resources to better meet the priorities of Canadians through excellent, cost-effective programs and services.

Corporation Income Tax Returns

Starting with the 2010 tax year, Internet filing will be mandatory for certain corporations with annual gross revenues that exceed $1 million.

Internet filing for T2 corporation income tax returns has been available since 2002. Currently, more than 90% of corporations use software to prepare their T2 returns, and 22% of corporations file through the Internet. With the introduction of mandatory Internet filing for corporations with gross revenues of more than $1 million, the CRA expects an additional 200,000 corporations (out of 1.8 million) to file online.

Corporations can use the CRA’s Corporation Internet Filing service or My Business Account to Internet file. Both are easy to use, convenient, secure, and confidential.

While there are no fees associated with Internet filing, corporations are required to use CRA-approved software to file tax returns through the Internet.

Exemptions

Some corporations filing T2 returns with gross revenues in excess of $1 million will be exempt from the new Internet filing requirements. These include insurance corporations; non-resident corporations; corporations reporting in functional currency, and corporations that are exempt from tax payable under section 149 of the Income Tax Act.

Penalties for filing in other formats

The CRA is providing a one-year transitional period to allow filers time to adapt to these changes. Beginning with the 2011 tax year, corporations that are required to file tax returns through the Internet, but file using paper, will be subject to a non-compliance penalty.

Information Returns

Starting in January 2010, mandatory Internet filing applies to filers of information returns who submit more than 50 information slips.

Filing information returns electronically (through the Internet or on electronic media such as a CD, DVD, or diskette) is already mandatory for filers submitting more than 500 information slips. Starting in January 2010, filers that submit more than 50 information slips such as T3, T4 and T5 will be required to file using the Internet only.

Information slip filers can electronically submit slips using the CRA’s Internet file transfer (XML). To submit T4 slips, filers can also use the T4 Desktop Application (up to 70 slips) or My Business Account.

Penalties for filing in other formats

The CRA is providing a one-year transitional period to allow filers time to adapt to these changes. Penalties for not filing through the Internet, if required to do so, may be assessed starting January 1, 2011.

Assistance with Internet filing

The CRA offers business owners and their authorized representatives help with Internet filing and electronic services.

Assistance with Corporation Internet Filing is available Monday to Friday by calling:

* Corporation Internet Filing Helpdesk: 1-800-959-2803

Assistance with other electronic services including My Business Account and Internet file transfer is available Monday to Friday by calling:

* e-service Helpdesk for businesses: 1-877-322-7849
* TTY e-service Helpdesk for businesses: 1-888-768-0951
* collect, outside of Canada and the United States: 709-772-8371

For more information on mandatory Internet filing, go to http://www.cra.gc.ca/corporation-internet (corporations) or http://www.cra.gc.ca/iref (information returns).

Source: CRA Newsroom

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