Table of penalties

In this table, except for the last row, "Yes" means that you may face a penalty for non-compliance, while "No" means you won't face a penalty. 

Failure to file

• 162(7) – Failure to comply – The penalty for failing to file a return is $25 per day for up to 100 days (minimum $100 and maximum $2,500).

• 162(10)(a) – Failure to furnish foreign-based information – Where the failure to file is done knowingly or under circumstances amounting to gross negligence, the penalty is $500 per month for up to 24 months (maximum $12,000), less any penalties already levied. This penalty does not apply to Form T1142.

• 162(10)(b) – Failure to furnish foreign-based information – Where a demand to file a return is issued under subsection 233(1) of the Income Tax Act and the person or partnership knowingly or under circumstances amounting to gross negligence fails to comply with the demand, the penalty is $1,000 per month for up to 24 months (maximum $24,000), less any penalties already levied. This penalty does also apply to Form T1142.

• 162(10.1) – Additional penalty – After 24 months, the penalty becomes 5% of whichever of the following resulted in the requirement to file the information return, less any penalties already levied: the cost of the foreign property; the fair market value of the property transferred or loaned to the trust; or the cost of the shares and indebtedness of the foreign affiliate. This penalty does not apply to Form T1142.

False statements and omissions

• 163(2.4) – This penalty applies to people who, knowingly or under circumstances amounting to gross negligence, make false statements or omissions in an information return.

In the case of Form T1142, the penalty is the greater of either $2,500 or 5% of whichever of the following the false statement or omission was made about: the fair market value of the distributed property; or unpaid indebtedness.

In the case of the other information returns, the penalty is the greater of either $24,000 or 5% of whichever of the following the false statement or omission was made about: the cost of the foreign property; the fair market value of the property transferred or loaned to the trust; or the cost of the shares and indebtedness of the foreign affiliate.

Due diligence exception

• 233.5 – The penalty for omissions in Forms T1134 and T1141 is not applicable to taxpayers who make diligent efforts to obtain the requested information and who:
  • disclose in the return the unavailability of the information
  • file the information within 90 days of it subsequently becoming available

Forms and publications

• Form T106, Information Return of Non-Arm's Length Transactions with Non-Residents
• Form T1134, Information Return Relating to Controlled and Not-Controlled Foreign Affiliates
• Form T1135, Foreign Income Verification Statement
• Form T1141, Information Return in Respect of Contributions to Non-Resident Trusts, Arrangements or Entities
• Form T1142, Information Return in Respect of Distributions from and Indebtedness to a Non-Resident Trust