File Tax Return on Time and Avoid the Consequences

 If you are doing any business in Canada or a corporation, you need to file your tax return. Filing on time has advantages, whereas late filing will cause you to get penalized by the CRA (Canada Revenue Agency). If you want to maintain your goodwill doing a business in Canada, you should pay your taxes on time; otherwise, you can face grave penalties. Let us see various reasons why you need to file returns on times:


  1. Late-Filing Penalty: You will get penalized under the Excise Tax Act and Income Tax Act if you file your returns late, which are calculated as a percentage of tax you owe with monthly increments over one year. As a taxpayer, you are required to file your returns on time; otherwise, you will be assessed for failure with penalties that can compound if you fail to file multiple times.


  1. Criminal Charges and More Penalties: Failing to pay taxes on time will force the enforcement to take severe actions against you, such as liens on your property or your accounts seizes. You will have to bear criminal charges only if you avoid filing your returns or utilizing a false report about yourself about tax payments. If you do not want to get penalized for a criminal tax offence with complete failure to file your return, you should file returns on the dot.


  1. Arbitrary Tax Assessments and More Taxes: CRA can issue you an arbitrary or notional tax assessment if you fail to file your taxes. Arbitrary tax assessments always result in more taxes due to the failure to file taxes and generally wait 90 days to take legal action after the tax assessment issuance. If you do not want to be in a situation to face this assessment, you need to file your returns.


  1. CRA Tax Audit: CRA may audit you if you do not file your taxes on time or are on the list of suspects among taxpayers. If you do not want the CRA to audit you and maintain your goodwill as a business owner in Canada, you need to file returns on time.


  1. Claiming of Tax Credits: You cannot claim tax credits if the taxpayer does not file a return in a tax year when the credit is earned. You can utilize tax credits in the coming years, though. You need to file your returns on time to make the most of tax credits. 


Conclusion:-


As a business owner in Canada, you need to file your taxes on time. If you do not file your tax return on time, you can suffer from the following:


  1. CRA will impose a late-filing tax penalty on you if you do not file returns on time.

  2. You can be charged for a criminal tax offence with a complete failure to file your return.

  3. You have to pay more taxes if an arbitrary tax assessment is issued against you.

  4. CRA may audit you if you are a suspicious tax filer for any reason.

  5. You will not be able to claim your tax credits


If you pay your taxes on your time, you can avoid penalties from the CRA and take advantage of tax credits.

Author Bio:-

Sohail Afzal is a CMA (Certified Management Accountant) and the Founding Partner of a professional accounting firm, GTA Accounting. He understands the needs of small-scale businesses & corporations and offers them tax advice to overcome their tax burdens. He is a professional author who often writes articles related to accounting.


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