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GST/QST - Interest and penalties

One very important fact with regard to GST and QST duty to file and pay, is that it must be done at the prescribed time. Otherwise, the taxpayer will likely be subjected to penalties an interest

Failure to file, failure to answer a request to file, failure to file electronically, failure to accurately report information are all instances where penalties and interest may apply.

Penalties for GST late filing
A penalty for failure to file on time will be imposed unless no taxes were payable or a refund was owed by the tax department. The penalty is equal to 1 % of tax owed, plus 0.25 % of the unpaid taxes times the number of late months, up to 12, a maximum of 4 %.

Interest for GST
Interest will be charged on the following amounts:

  • any overdue balance owing on a GST/QST return
  • any other overdue GST/QST amount that you have to remit
  • interest on the part of any instalment payment that was not paid or that was paid late
  • penalties

The interest rate is determined every three months in accordance with the prescribed interest rate compounded daily. The interest rate can easily be found on the CRA’ s Web site.

QST Penalties for late filing
The penalty is equal to 15 % of amount owed.

Other QST penalties
Generally speaking, corporate taxpayers that are under the obligation to collect taxes and have amounts owed due to late filing, will have to pay :

  • 7 & of the amount owed if less than 7 days late;
  • 11 % of the amount owed if less than 14 days late;
  • 15 % of amount owed in other cases.