Penalties and Interest

Late filing and failure to file a Part XVIII or Part XIX information return

We consider your return to be filed on time if we receive it on or before the due date.

The minimum penalty for late filing the Part XVIII or Part XIX information return is $100 and the maximum penalty is $7,500. For more information on the complete penalty structure, go to Late filing information return.

Failure to file a Part XVIII or Part XIX information return over the Internet

You must file your Part XVIII and Part XIX information return electronically by using the CRA Internet file transfer (XML) or Web Forms applications. To find out when these applications are available, go to Filing Information Returns Electronically (T4/T5 and other types of returns). If you do not, you may be liable to a penalty.

Failure to provide an identification number

Individuals, corporations, trusts, or partnerships have to give their identifier number (for example, U.S. federal taxpayer identifying number (U.S. TIN), social insurance number (SIN), trust account number or business number (BN)) on request to anyone who has to prepare an information slip on their reportable account. Under Part XVIII, a person or partnership that does not give their identification numbers is liable to a $100 penalty for each failure while they are liable to a $500 penalty for each failure under Part XIX.

A person or partnership that does not have an identification number must apply for one within 90 days of the date of an information request for a U.S. or foreign TIN and 15 days for a SIN, a trust account number or a BN. After receiving the identification number, the person has 15 days to give it to the person who is preparing an information return. The penalty for failure to provide a number will not apply if the person or partnership has applied for, but has not yet received, the number.

Failure to provide information on a return

Anyone who prepares an information return must make a reasonable effort to get the necessary information, including identification numbers, from the account holder for whom you are preparing the slips. If you do not include the necessary information on a return, you may be liable to a $100 penalty for each failure.

Failure to provide an identification number on an information return

Make sure the identification number and name you enter on the Part XVIII or Part XIX information return for each account holder are correct.

If the person or entity does not give you his or her identification number, you have to be able to show that you made a reasonable effort to get it. For example, if you contact an account holder by mail to ask for his or her identification number, be sure to record the date of your request and to keep a copy of all correspondence that relates to it. If you do not make a reasonable effort to get the identification number, you may have to pay a penalty of $100 for each failure. If you cannot get an identification number from the account holder, file your information return, without the identification number, on or before the due date. Otherwise, we may assess you a penalty for not sending your information return on time.

Using the identification number

If you have to prepare an information return, or if you are an officer, employee, or agent of someone who does, you cannot knowingly use or communicate an identification number, or allow it to be communicated, without the written consent of the person or partnership, other than as required or authorized by law or for the purpose for which the number was given.

If you use an identification number for unauthorized purposes, you may be guilty of an offence. If convicted, you are liable to a maximum fine of $5,000 or imprisonment of up to 12 months, or both.

Notice

We will issue a notice for the Part XVIII or Part XIX information return if we apply a penalty.

Interest

If you fail to pay an amount, we can apply interest from the day your payment was due. The rate we use is the prescribed interest rate that is determined every three months and is compounded daily.

Cancel or waive penalties or interest

The CRA administers legislation, commonly called Taxpayer relief provisions, that allows the CRA discretion to cancel or waive penalties or interest when taxpayers cannot meet their tax obligations due to circumstances beyond their control.

For more information, go to Information Circular IC07-1R, Taxpayer Relief Provisions.

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