Interest and Penalties

Prescribed CRA interest rates on overdue taxes and non-arms length loans

  Tax Arrears Tax Refunds Shareholder Loans
       
2019      
1st Quarter 6% 2% 2%
2nd Quarter 6%  2% 2% 
3rd Quarter      
4th Quarter      
       
2018      
1st Quarter 6% 2% 2%
2nd Quarter 6%  2%  2%
3rd Quarter 6% 2%   2%
4th Quarter 6% 2%  2%
       
2017      
1st Quarter 5% 3% 1%
2nd Quarter  5%  3%  1%
3rd Quarter  5%  3%  1%
4th Quarter  5%  3%  1%
       
2016      
1st Quarter 5% 3% 1%
2nd Quarter  5%  3%  1%
3rd Quarter  5%  3%  1%
4th Quarter  5%  3%  1%
       
2015      
1st Quarter 5% 3% 1%
2nd Quarter 5% 3% 1%
3rd Quarter 5% 3% 1%
4th Quarter 5% 3% 1%
       
2014      
1st Quarter 5% 3% 1%
2nd Quarter 5% 3% 1%
3rd Quarter 5% 3% 1%
4th Quarter 6% 4% 2%
       
       
2013      
1st Quarter 5% 3% 1%
2nd Quarter 5% 3% 1%
3rd Quarter 5% 3% 1%
4th Quarter 5% 3% 1%
       
       
2012      
1st Quarter 5% 3% 1%
2nd Quarter 5% 3% 1%
3rd Quarter 5% 3% 1%
4th Quarter 5% 3% 1%
       
       
2011      
1st Quarter 5% 3% 1%
2nd Quarter 5% 3% 1%
3rd Quarter 5% 3% 1%
4th Quarter 5% 3% 1%
       
       
       
Description Penalty
Failure to file income tax returns (T1, T1OVP, T2, T3)

First occurrence – 5% of unpaid tax plus 1% per month not to exceed 12 months
Second occurrence – If a first occurrence within three years, 10% of unpaid tax plus 2% per month not to exceed 20 months.

   
Failure to provide information on prescribed forms $100 for every occurrence
   
False statements or omissions knowingly or under gross negligence Greater of $100 and 50% of the tax payable on understatement of income
   
Failure to report income in year and any of three preceding years 10% Federal and Provincial of the amount not reported
   
Failure to deduct, withhold, or remit tax deducted and withheld

First occurrence – 10% of amounts not deducted, withheld or remitted
Second occurrence – 20% of amounts not deducted, withheld or remitted

   
Tax evasion On summary conviction, 50% to 200% of tax evaded or both the fine and imprisonment for up to two years. On indictment, 100% to 200% of tax evaded and imprisonment for up to five years
   
Failure to remit source deductions

3% up to three days, 5% four days to five days, 7% six days to seven days and 10% over seven days

   
Failure to maintain adequate books and records Prosecution and a fine not less than $1,000