Penalties

Any person, promoter, tax professional, or other third party who is closely or remotely involved with the development of a tax shelter, is exposed to penalties regarding false or misleading information, or omission of or inappropriate use of the tax shelter identification number.

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False or misleading information

Under subsection 237.1(7.4), every person:

is liable to a penalty that is the greater of:

Failing to file a return

Under subsection 237.1(7.5), every person who fails to:

is liable to a penalty that is 25% of the greater of:

  1. the total of all consideration received or receivable in respect of a tax shelter from a particular person in respect of whom the required information had not been reported at or before the time that the demand was issued or the return was filed
  2. if the tax shelter is a gifting arrangement, the total of all amounts stated or represented to be the value of property that the particular person could donate to a qualified donee

Misrepresentation of a tax matter by a third party

The Income Tax Act provides for third-party civil penalties to deter third parties from making false statements or omissions in relation to income tax or GST/HST matters. The following penalties are directed at ensuring tax compliance and deterring inappropriate behaviour.

Penalties for misrepresentation in tax planning arrangements

Under subsection 163.2(2), a penalty applies to a person who makes or furnishes a statement, participates in making a statement or causes someone else to make or furnish a statement when:

Under subsection 163.2(3), the penalty for the false statement is:

Penalties for participating in a misrepresentation

Under subsection 163.2(4), a penalty applies to a person who makes, participates in, assents to or acquiesces in making a statement to, by, or on behalf of someone else when:

Under subsection 163.2(5), the penalty for the false statement is:

to a maximum of whichever of the following amount is less:

Failing to provide the tax shelter identification number

The Canada Revenue Agency can assess a penalty of $100 for each failure if the tax shelter identification number is missing on a form.

Providing an incorrect tax shelter identification number

If you give an incorrect tax shelter identification number, you may be guilty of an offence and, if convicted, liable to:

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