Businesses that have registered to charge and collect GST must file a return to the CRA at intervals determined by the CRA. Depending upon your business income you may have to file monthly, quarterly or annually. If a business misses it's filing deadline it may be subject to penalties.
The CRA says that if a business has a zero balance GST account or it is owed a refund from the CRA then it will not get any late penalties. If a business does owe a balance and files a late return then late penalties will be applied. GST penalties are 1% of the balance owed, plus the result of the calculation of 25% of the 1% x the number of months the return is overdue to a maximum of 12 months.
For example: 1% of $20,000 = $200
(25% of $200) x 6 (months) = $300
$300 + $200 = $500 total penalties
In addition the CRA will charge interest on any overdue amount equal to the 90 day Treasury bill rate plus 4%. This also applies if you have been instructed to make instalment payments and you do not pay by the due date.
There are other penalties that you can incur by not filing a GST return on time. If you receive a demand to file a GST return and do not do so then a penalty of $250 will be charged. If you fail to file electronically when required to do so you will be charged a penalty of $100 for the first offence and $250 for each instance afterwards.
What happens if you file an incorrect return?
It is worth also noting that you cannot claim any income tax deduction for penalties or interest that you may have to pay if you file your GST report late.
From an article by Susan Ward
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