You owe CRA your Income Tax and somehow you couldn’t make it to file before the 30th of April. Now, what next? Are you going to pay the CRA Late Payment Penalty for filing your taxes late? Yes.
According to the report 2013, late filing fees are 5% of your balance, plus an extra 1% of your balance for each full month. For 12 months, this fine will rise monthly. Additionally, the CRA has imposed a 10% late filing penalty for 2013 in addition to a 2% late filing penalty.
If you owe taxes and fail to submit by the due date, you will be responsible for paying interest charges of 1% per month, up to a maximum of 12 months, equal to 5% of the tax sum you owe.
What if You often get CRA Late Payment Penalty
If for the last three years you have filed your taxes late then my friend you can face trouble!
The additional penalty will be mentioned in your demand letter if the CRA issues you a demand to file a return. You would then pay 10% of the outstanding balance plus 2% of the balance for a maximum of 20 months. So the total CRA Late Payment Penalty is $3,540.
Will you pay CRA Late Payment Penalty even if you don’t owe any tax?
The answer is a simple “NO”. You don’t have to pay CRA Late Payments Penalty if you don’t have any tax to pay in the first place. This process is only for the ones who owe CRA taxes. So if you are among the one who doesn’t owe any tax then this article is surely not for you.
Should you Pay CRA Late Payment Penalty if your tax service committed a mistake?
Professionals sometimes make mistakes, and such errors carry a cost as well. If your tax service makes a mistake they owe a fine of $1,000 or 50% of the amount you as the customer would have avoided paying.
The service which was covering your filling should pay half of the CRA Late Payment Penalty.
Do you have to pay CRA Late Payment Penalty if you have mentioned false information?
If you have entered false information, or you have passed the due date then you owe CRA Late Payment Penalty. The penalty is 10% of the unreported income or 50% of the difference between the tax and the amount of tax withheld.