Schedule 125. Income Statement Information
Schedule 125 (T2SCH125) reports income statement items using CRA's General Index of Financial Information (GIFI) codes, producing the book net income that starts Schedule 1.
Definition
Schedule 125 (T2SCH125) is the income statement of the corporation for the tax year, presented using GIFI codes in the 8000-9999 range. Every revenue, cost of sales, and expense line on the trial balance must map to a standardized GIFI code. The final figure (GIFI 9999, net income or loss after tax) is the book net income that becomes line 9999 on the T2 jacket and the starting point of .
Schedule 125 is mandatory for essentially every T2 filer. Corporations under the small-filer threshold (gross revenue and total assets under $1M each) may use the simplified GIFI-Short (T1178) instead.
Key lines
The GIFI income statement is structured in a standard format:
| GIFI range | Section | Key codes |
|---|---|---|
| 8000-8299 | Revenue | 8000 Trade sales of goods and services, 8090 Total sales, 8120 Cost-recoveries |
| 8300-8519 | Cost of sales | 8320 Purchases, 8500 Direct wages |
| 8520 | Gross profit | Subtotal |
| 8521-9367 | Operating expenses | 8710 Salaries, 8810 Office, 8871 Meals, 8860 Professional fees, 8914 Motor vehicle |
| 9368-9659 | Non-operating / other | 9367 Interest and bank charges, 9970 Capital gain/loss (book) |
| 9970 | Extraordinary items | - |
| 9975 | Current income taxes | - |
| 9976 | Deferred income taxes | - |
| 9999 | Net income / loss after tax | Ties to GIFI 3640 on |
Key control: GIFI 9999 (net income after tax) on Schedule 125 must equal GIFI 3640 on Schedule 100, and that amount is the starting point of Schedule 1. If the three figures do not tie, the return is internally inconsistent and will be rejected by EFILE.
Revenue details (8000 block): CRA wants revenue split by operating activity. A consulting CCPC would use 8000; a property management corporation would use 8140 (rental revenue); a manufacturer would use 8000 plus cost-of-sales codes in 8300s.
Example
A consulting CCPC's 2026 income statement maps to Schedule 125:
Common mistakes
Reporting 100% of meals on Schedule 125 and forgetting the 50% add-back on line 121. Schedule 125 is the books, not the tax return. The 50% restriction is a Schedule 1 adjustment.
- Mapping software subscriptions to 8811 (telecommunications) instead of 8860 or 8813. Consistent year-over-year GIFI mapping is important for trend analysis.
- Including CCA on Schedule 125. Schedule 125 shows book amortization (GIFI 8670); tax CCA belongs on and is added back through Schedule 1 lines 104/403.
- Reporting revenue gross of HST when the corporation is registered. Revenue is net of recoverable sales taxes.
- Using GIFI 9970 (extraordinary items) for ordinary capital gains or losses. IFRS/ASPE no longer permit extraordinary classification; use the appropriate revenue or gain line.
- Letting GIFI 9999 drift from GIFI 3640 on Schedule 100 because dividends declared were posted through the P&L by mistake.
Related concepts
Authority
- CRA Form T2SCH125
- CRA GIFI Guide RC4088
- Income Tax Act s.150(1)
See also
Related entries
GIFI Overview
The General Index of Financial Information (GIFI) is CRA's standardized four-digit coding system that maps every balance sheet and income statement account to a T2 return line.
GIFI Income and Expense Accounts
GIFI codes 8000 to 8299 capture revenue and 8300 to 9999 capture every expense reported on Schedule 125, from salaries and rent through professional fees and interest.
Income Statement
The Income Statement (Statement of Operations) reports revenue, expenses, and net income for a reporting period.
Schedule 100. Balance Sheet Information
Schedule 100 (T2SCH100) reports balance sheet items using CRA's General Index of Financial Information (GIFI) codes, mapping the corporation's trial balance accounts to standardized CRA categories.
Schedule 1. Net Income for Tax
Schedule 1 (T2SCH1) reconciles a corporation's accounting net income to its net income for tax purposes by adding back non-deductible items and subtracting tax-only deductions.
This entry is for general reference. It does not constitute professional tax advice. Consult a qualified Canadian accountant for your specific situation.