Subsection 284.1(2)
Administrative Policy
May 2019 CPA Alberta CRA Roundtable, GST Session – Q.6
When asked about the application of the ETA s. 284.1 penalty to an unfiled return, and whether a zero dollar line item triggers the minimum penalty amount of $1,000, CRA stated:
Where an information return that was not filed on time is subsequently filed, and the correct amount reported on the particular line is zero … there would be no penalty under subsection 284.1(1) based on the formula for calculation the penalty in that subsection. …
Where an information return that was not filed on time is subsequently filed, and the correct amount reported on the particular line is zero … a penalty under subsection 284.1(2) would be calculated based on the formula in that subsection.
Specifically, a penalty under subsection 284.1(2) may apply if a reporting institution fails to provide reasonable estimates of amounts for which estimates can be provided when and as required. For each failure, the penalty is equal to the lesser of $1,000 and 1% of the total of:
- all amounts that became collectible or that were collected by the reporting institution, as or on account of the GST/HST, in a reporting period in that fiscal year; and
- all amounts that the reporting institution claimed an as input tax credit in a GST/HST return filed by the reporting institution for a reporting period in the fiscal year.
It is important to note that a penalty under subsection 284.1(1) or (2) of the ETA will only apply where the reporting institution did not exercise due diligence.
Where a return has not been filed, the CRA may apply the $1,000 penalty for a particular line in the absence of information that would support a lower penalty amount.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 284.1 - Subsection 284.1(3) | penalty waived in extraordinary circumstances | 88 |
RC4419 "Financial Institution GST/HST Annual Information Return"
Estimated amounts
You may enter a reasonable estimate of an amount for certain lines, where indicated, where the amount is not reasonably ascertainable. This guide contains information about the lines you may be able to complete using estimates.
If the amount you enter on a line is an estimated amount, you have to tick the grey box beside the line number.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 273.2 - Subsection 273.2(3) | 130 | |
| Tax Topics - Excise Tax Act - Section 296 - Subsection 296(1) - Paragraph 296(1)(a) | 159 |
Subsection 284.1(3)
Administrative Policy
May 2019 CPA Alberta CRA Roundtable, GST Session – Q.6
In commenting on the waiver of penalties under s. 284.1(3), CRA stated:
Generally, penalties would be cancelled or waived where they have resulted from an extraordinary circumstance beyond a person’s control, which prevented the person from complying with the reporting requirements in section 273.2 of the ETA. The fact that a particular financial institution is unaware of its obligations to file the information return by itself would not generally be sufficient justification for the Minister to waive or cancel penalties payable under section 284.1.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 284.1 - Subsection 284.1(2) | late filing a financial institution return is not particularly relevant to the imposition of an ETA s. 284.1 penalty | 288 |
May 2016 Alberta CPA Roundtable, GST Q.13
The requirement to file Form GST111 for financial institutions that are reporting institutions applies to fiscal years beginning after 2007. Where there is no history of filing Form GST111, is the Voluntary Disclosure Program the best means of back filing the information schedule to avoid penalties? CRA responded:
Generally, penalties would be cancelled or waived where they have resulted from an extraordinary circumstance beyond a person’s control, which prevented the person from complying with the reporting requirements in section 273.2. The fact that a particular financial institution is unaware of its obligations to file an information return would not generally be sufficient justification for the Minister to waive or cancel penalties payable under section 284.1. However, under the Voluntary Disclosures Program, GST/HST registrants can make disclosures to…avoid penalty… if they make a valid disclosure.
CBAO National Commodity Tax, Customs and Trade Section – 2014 GST/HST Questions for Revenue Canada, Q. 12
Generally, penalties would be cancelled or waived where they have resulted from an extraordinary circumstance beyond a person's control, which prevented the person from complying with the reporting requirements in section 273.2. The fact that a particular financial institution is unaware of its obligations to file an information return for its 2010-2012 fiscal years by itself would not generally be sufficient justification for the Minister to waive or cancel penalties payable under section 284.1.
However, under the Voluntary Disclosures Program GST/HST registrants can make disclosures to disclose information they have not provided during previous dealings with the CRA, and may avoid penalty or prosecution if they make a valid disclosure.