Life hasn’t returned to normal yet; for better or worse, it probably never will. But despite all the changes in old habits we are weaning off with reluctance, life goes on, and the CRA is slated to collect taxes.
Like clockwork, the CRA requires all residents of Canada to fire off their income tax returns by April 30 – with no exception this year – and levies a range of penalties to ensure compliance for both individuals and businesses.
Late filing penalties for individuals
If you have earned a refund or owed no further tax to the CRA, no penalty will ensue due to late filing; however, you will be assessed of 5% on the amount owed with an extra monthly charge for each late month up to a whole calendar year.
Your payment is due on the same day as your income tax return. If you struggle to make the full payment, however, the CRA will accept late payments, with the catch of daily interest on all due amounts.
False statements and tax evasion
Don’t do that. This is a serious offense that could result in jail time, or a fine up to 50% of the evaded taxes or falsely claimed credits.
Be sure that your lifestyle commensurates with the amount of income you report in your tax return. Incongruity will raise an eyebrow at a heavy cost.
At Ke Wang, we do represent clients and help them prepare for audits. But with our hand on the Bible, we hope it will never come to that.