Failure to file penalties

If you file your return late, a penalty applies. The penalty is 5% of the unpaid tax that is due on the filing deadline, plus 1% of this unpaid tax for each complete month that the return is late, up to a maximum of 12 months.

The corporation will be charged an even larger penalty if we issued a demand to file the return and we assessed a failure to file penalty for the corporation in any of the three previous tax years. The penalty is 10% of the unpaid tax when the return was due, plus 2% of this unpaid tax for each complete month that the return is late, up to a maximum of 20 months.

References
Subsections 162(1), and 162(2) of the Income Tax Act.

Forms and publications

• T2 Corporation – Income Tax Guide (T4012)
• Corporation Instalment Guide (T7B-CORP)

Date modified:

2017-02-07