Description

Penalty/Offence

Late or deficient instalment  

payments

 50% of the interest payable on instalments for 

the year in excess of $1,000, or 25% of interest 

payable computed as if no instalments had been 

made, whichever is greater

Failure to deduct or withhold tax 

 First occurrence—10% of amount not deducted 

or withheld

8

Second occurrence—20% of amount not 

deducted or withheld

9

False information on tax shelter  

application or sale of tax shelter  

before number is issued

 Greater of $500 and 25% of cost of shelters sold 

prior to the correct information being filed or 

issuance of identification number

Wilfully providing incorrect  

tax shelter identification  

number

 On summary conviction, fine from 100% to 

200% of cost of tax shelter, imprisonment for up 

to two years, or both

Tax evasion

 

On summary conviction, fine from 50% to 200% 

of tax sought to be evaded, or both the fine and 

imprisonment for up to two years
On indictment, fine from 100% to 200% of tax 

sought to be evaded and imprisonment for up to 

five years

Third-party participation in  

a misrepresentation

 Greater of $1,000 and penalty levied for a false 

statement or omission, capped at a total of 

$100,000 plus third-party’s compensation

Third-party misrepresentation  

in tax planning arrangements

 Greater of $1,000 and 100% of the gross 

revenue derived from the arrangement if the 

arrangement is in respect of a planning or 

valuation activity

Selected Federal Penalty and Offence Provisions  /  115

Current as of May 3, 2013

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