If you miss a GST/HST payment deadline or file your return late, the CRA may charge penalties and compound interest on the unpaid amount. The penalty starts at 6% of the unpaid tax for a first-time miss, increasing to 12% if you've had another late-filing penalty in the past 3 years, plus monthly interest accrues at the prescribed rate. Understanding these charges helps you budget for compliance and avoid costly surprises. When you file your GST/HST return after the deadline, the CRA applies an automatic penalty. This penalty is calculated as a percentage of the net tax balance owing at the time of filing: First occurrence: 6% of the unpaid GST/HST amount Second occurrence (within 3 years): 12% of the unpaid amount Subsequent occurrences (within 3 years): 12% of the unpaid amount These penalties apply regardless of whether you owe tax or are due a refund. If you file late but don't owe any net tax, you won't face a penalty (though you may still owe interest on any amounts you paid late). The penalty is separate from interest charges. Even if you file on time, paying your tax balance late triggers compound daily interest.
The first-time late-filing penalty is 6% of your unpaid GST/HST balance. If you've had another late-filing penalty within the past 3 years, the penalty increases to 12%. The penalty is calculated on the net tax owing when you file, not on total sales or revenue.
Yes. Interest is charged on unpaid GST/HST amounts from the due date until payment is received, regardless of when you file. Interest compounds daily at the CRA's prescribed rate, which changes each quarter.
Yes, you may request relief through the CRA's Fairness Package if you missed deadlines due to extraordinary circumstances like illness or family emergency. You'll need to submit a written request with supporting documentation and explain why you couldn't comply.
The CRA's prescribed interest rate changes each quarter and varies by situation. Check the CRA website for the current rate or contact them directly, as rates for 2026 will depend on economic conditions set by the government.
Beyond late-filing penalties, you may face gross negligence penalties (up to 50% of unpaid tax), false statement penalties (25%), and penalties for failing to keep records (up to $25,000 per violation). These apply if the CRA determines intentional misrepresentation or recklessness.