Late GST/HST returns in Canada: penalties, relief and catching up

Let 2Fin do the boring bits

Catching up is mostly sorting, and sorting is the part 2Fin takes off you. Bring in two years of bank statements at once — CSV, Excel or PDF, several files in one go — and Fin reads every line; in testing, 1,891 transactions came in in about a second on a desktop computer. Each transaction is categorised with its GST or VAT worked out, every overdue period is listed with its due date, and Fill all periods saves a draft of each one with a single press.

What is left for you is the decisions, not the data entry. Purchases are grouped by payee — the supplier, the phone company, the software subscription — so you answer each payee once and the answer covers every period. Fin’s confident guesses (80% sure or more) can be accepted in one tap and undone one by one, and a payee can become a rule so the next import sorts itself. Every figure opens to the transactions inside it, and the finished statements export for you or your agent to check and lodge.

What a late GST/HST return costs

The late filing penalty depends on how much is owing. It is 1% of the amount owing plus a quarter of that again for each complete month the return is late, up to 12 months. A return with nothing owing, or a refund due, attracts no late filing penalty; a demand to file adds $250. Interest is charged on the unpaid tax at the prescribed rate (7% for October–December 2026), compounding daily.

Most registrants have had to file electronically for periods beginning in 2024; a paper return where electronic filing is required has its own penalty.

File every period, even nil ones

A GST/HST return is due for every reporting period, including periods with nothing to remit, and the CRA holds any refund until every required return is filed. Your filing period depends on revenue: annual up to $1.5 million, quarterly to $6 million, monthly above that. An individual with business income and a 31 December year end pays by 30 April and files by 15 June.

The Voluntary Disclosures Program

The program changed on 1 October 2025. If you come forward before the CRA contacts you, it now relieves 75% of interest and 100% of penalties; if a CRA letter prompted you, 25% of interest and up to 100% of penalties. You apply on form RC199 with the supporting documents, and pay the estimated tax or ask for a payment arrangement with it. Anyone already under audit or investigation is outside the program.

Separately, taxpayer relief can cancel or waive penalties and interest for extraordinary circumstances, a CRA error or inability to pay, on form RC4288 within 10 calendar years of the end of the period. This is general information. Check what applies to you with a registered tax or BAS agent, or with the tax office.

Rebuilding each period from your bank history

Download statements for every period you owe. Sales give the GST/HST you collected (line 105); purchases you can evidence give your input tax credits (line 108). Charge the rate of the province where the sale was made: GST alone, or the harmonised rate in an HST province.

If you can’t pay

File, then set up a payment arrangement: businesses owing $1,000 or more can propose and confirm one in My Business Account, or call the CRA’s GST/HST line. Interest keeps compounding on the balance.

Importing your bank history and having it categorised starts free; preparing the BAS, VAT or GST statement is on the ELITE+ and AUTO+ plans (see plans).