What Is The Penalty For Tax Evasion In Canada?
Not paying your taxes on time may cause you to face fatal consequences. Tax evaders in Canada may have to encounter criminal penalties that can include imprisonment and huge amount of fines – up to 200% of the amount owed. Sometimes, lack of knowledge draws taxpayers to unintentional evasions.
So, professional advice should be sought from US tax consultants in Toronto if you are unsure about the procedures.
Know about the interests and penalties
Having a balance owing for the previous year, say 2018, is not good for you. CRA (Canada Revenue Agency) charges a daily compound interest on the amount unpaid. Most importantly, the rate of interest is revised every 3 months. Better if you keep an eye over the rates along with keeping in mind to file your tax return in time. Now, if you are paying the tax but filing your return after the due date, CRA is going to charge a late-file penalty. 5% of your last year’s balance, and 1% of the amount you owe for one full month, which you are late by, will be added to the fine.
Penalty for repeated failures to report your income
If you fail to report a certain amount of your income on the return-file of the previous year, you will be penalized, only if you have also ignored reporting amounts for last 3 consecutive years. You will be charged federal or territorial penalties amounting to 10% of the amount you owe for the last year OR 50% of the difference between the overstated credits/understated tax and the amount of tax calculated on the amount you have not reported. Whichever is LESSER – you pay that. International tax consultants in Toronto can guide you well, so that you don’t get penalized.
Charges for false statements
The result of making false statements in your return, deliberately or due to negligence, is paying an amount of 50% of the amount showing as understated tax/overstated credits OR $100 – whichever is GREATER. Unfortunately, cases of purposeful false statements or omissions are observed in great number. CRA, has hence, begun charging these penalties, to protect the economy and law of the nation.
We, at The Accounting and Tax, assist you by providing professional guidance regarding your audit, tax related issues, accounting and all other financial issues. Our company offers Canadian tax consulting service. Our experts, who specialize in tax matters, offer you valuable knowledge on tax-return filing and its procedures. If you are burdened with the complexities of tax matters, we are here for complete and affordable assistance.
