Penalties for late returns

The first time you file late

You’ll pay:

  • a late-filing penalty –5% of the amount of tax you owe, plus 1% for every month that your return is late, for up to 12 months. That adds up to a maximum of 17% of the tax you owe.
  • interest – at the prescribed interest rate on the amount you owe, beginning on May 1. You’ll also be charged interest on any late-filing penalties. Interest is compounded daily, not monthly or annually. The prescribed interest rateInterest rate A fee you pay to borrow money. Or, a fee you get to lend it. Often shown as an annual percentage rate, like 5%. Examples: If you get a loan, you pay interest. If you buy a GIC, the bank pays you interest. It uses your money until you need it back.+ read full definition can change every 3 months.

If you miss the deadline again

The late-filing penalties are doubled. For example, if the CRA charged you late-filing penalties for any of the 3 previous years, you would pay a penalty of up to 50% made up of:

  • 10% of the taxes you owe, plus
  • 2% of the taxes you owe for each full month that your return is late, to a maximum of 20 months.

If you owe tax from previous years

The CRA will keep charging you interest compounded daily on those amounts. Any taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition payments you make will be applied first to the tax owing from previous years.

Take action

If you owe tax:

  1. File your tax return by April 30 to avoid paying late-filing penalties.
  2. Pay the balance owing by April 30 to avoid paying interest.
Last updated