# TAX-12 — Late-filing penalties. T2 and T1

**Flag: Current** — Verified against the live source. Safe to cite.

**Late-filing penalties.** T2 and T1: 5% of the balance owing plus 1% per complete month, to a maximum of 12 months. Repeat case (a demand to file plus a failure-to-file penalty assessed in one of the three previous years): 10% plus 2% per month to 20 months. Repeated failure to report income: applies where $500 or more was unreported in the current year and in one of the three previous years; penalty is the lesser of 10% of the unreported amount and 50% of the understated tax net of amounts withheld. Interest compounds daily

## Sources

- T2 penalties (primary): https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-payments/avoiding-penalties.html
- T1 penalties (primary): https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4012/t2-corporation-income-tax-guide.html (mirror): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4012/t2-corporation-income-tax-guide.html

Jurisdiction: FED · Verified 2026-08-27 · Review: legislative