Filing your income tax return late in Canada won't get you immediately thrown in jail, but the decision does come with penalties and interest charges, which get worse the longer you wait.
According to the Government of Canada, the penalty for filing late is a 5% charge on top of the balance owing on your tax return, plus an additional 1% for each month that the return is late, for a maximum of 12 months.
The Canada Revenue Agency (CRA) will also compound daily interest on any unpaid tax balance, including the late-filing penalty. In addition, individuals who continuously file late could be subject to additional enforcement measures, such as garnishing wages or seizing assets to collect the outstanding balance.
It's worth noting that anyone who owes taxes that doesn't file their return on time is responsible for paying the amount owed plus any penalties and interest.
"If you cannot pay your balance owing, you should still file on time to avoid being charged the late-filing penalty," the government warns.
If you're unable to file your tax return on time, you can voluntarily disclose your intentions to the CRA to avoid penalties.
"This applies when taxpayers are unable to meet their tax obligations due to circumstances beyond their control," it adds.
You have the option to ask the CRA to cancel or waive any penalties or interest. However, it's important to note that the agency can only grant relief for requests made within ten years of the date of your request.
Anyone looking for further information on contacting CRA and its processes can find those details here.
This article's cover image was used for illustrative purposes only.
