You may have to pay penalties if you make false statements or omissions on your tax return, or if you repeatedly fail to report your income.

Repeated failure to report income penalty

You may have to pay a federal and provincial or territorial penalty if you fail to report an amount of $500 or more on your:

• 2023 tax return
• 2020, 2021 or 2022 tax returns

The penalty is whichever amount is less:

• 10% of the amount you failed to report (federal and provincial or territorial)
• 50% of the difference between:
  • the understated tax or overstated credits for the amount that you failed to report
  • the tax withheld from the amount you failed to report

The CRA may grant you penalty relief if you voluntarily disclose amounts that you failed to report or credits that you overstated (or both) before the CRA contacts you or anyone who is related to you.

For more information: Voluntary Disclosures Program (VDP)

Exceptions to the federal and provincial or territorial penalties

There are 2 exceptions:

Quebec residents

Only the federal penalty will be applied as the provincial tax is assessed by Revenu Québec.

Non-residents and deemed residents of Canada

The provincial or territorial penalty will be applied only if provincial or territorial tax is payable.

False statements or omissions penalty

You may have to pay a penalty if you, knowingly or under circumstances amounting to gross negligence, made a false statement or omission on your 2023 return.

The penalty is whichever amount is more:

• $100
• 50% of the understated tax or the overstated credits (or both) related to the false statement or omission

The CRA may grant you penalty relief if you voluntarily disclose amounts that you failed to report or credits that you overstated (or both) before the CRA contacts you or anyone who is related to you.

For more information: Voluntary Disclosures Program (VDP)

Request to cancel or waive penalties or interest

You can make a request to the CRA to cancel or waive penalties or interest if you are unable to meet your tax obligations due to circumstances beyond your control.

The CRA can only grant relief within 10 years from your request date.

For more information: Cancel or waive interest or penalties