Penalty for late-filing a final return

If you file the final return late and there is a balance owing, the CRA will charge a late filing penalty. The CRA will also charge you interest on both the balance owing and any penalty. The penalty is 5% of any balance owing, plus 1% of the balance owing for each full month that the return is late, to a maximum of 12 months. The late-filing penalty may be higher if the CRA charged a late-filing penalty on a return for any of the 3 previous years.

Tax Tip

Even if you cannot pay the full amount owing by the due date, you can avoid this penalty by filing the return on time.

In certain situations, the CRA may cancel this penalty and interest if you file the return late because of circumstances beyond your control. If this happens, complete Form RC4288, Request for Taxpayer Relief: Cancel or Waive Penalties or Interest, or include a letter with the return explaining why you filed the return late. For more information, go to Taxpayer relief provisions or see Information Circular IC07-1, Taxpayer Relief Provisions.

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