Limitation period on exercising discretion and the deadline for requesting relief
The Minister's discretion to grant relief is limited to any period that ended within 10 years before the calendar year in which a request is submitted or an income tax return is filed.
Penalty, election, and refund or adjustment requests – Income Tax Act
A taxpayer has 10 years from the end of the calendar year in which the tax year or fiscal period at issue ended to make a request to the Canada Revenue Agency (CRA) for relief to:
- cancel or waive penalties
- accept a late, amended, or revoked income tax election, or
- issue a refund or adjustment beyond the normal three-year period
This means that for requests or income tax returns that are filed in the current calendar year, the Minister has no authority to provide relief when the request is for a tax year or fiscal period that ended more than 10 years before the calendar year in which the request is made.
Example
- To be eligible for consideration, an initial request or income tax return filed during the 2015 calendar year must deal with an issue related to the taxpayer's 2005 and later tax years (or fiscal periods). A request or return related to a taxpayer’s 2004 and previous tax years (or fiscal periods) is not eligible for consideration since those tax years (or fiscal periods) are beyond the 10-year period.
The 10-year limitation period rolls forward every January 1.
Interest requests – Income Tax Act, Excise Tax Act, Air Travellers Security Charge Act, Softwood Lumber Products Export Charge Act, 2006, Select Luxury Items Tax Act, Greenhouse Gas Pollution Pricing Act, Underused Housing Tax Act, and Excise Act, 2001
Under the 10-year limitation period, the Minister may cancel or waive interest that accrued within the last 10 calendar years before the year the request is made for any tax year or reporting period.
Example
- An initial request made during the 2015 calendar year related to any interest that accrued during the 2005 and later calendar years, for any tax year or reporting period, is eligible for consideration. Any interest that accrued before January 1, 2005, is not eligible for consideration.
The 10-year limitation rolls forward every January 1.
GST/HST registrants and claimants - Excise Tax Act
Regarding a GST/HST return for a reporting period that ended within 10 years before the calendar year in which the request is made, the Minister may cancel or waive all or a portion of the:
- failure to file a return penalty payable under section 280.1
- failure to electronically file penalty payable under section 280.11, and
- failure to accurately report information penalty payable under section 284.01
Example
- An initial request made during the 2015 calendar year related to a penalty for a reporting period that ended within 10 years before the calendar year in which the request is made is eligible for consideration. A request made for a reporting period that ended more than 10 years before the calendar year in which the request is made is not eligible for consideration.
The Minister may also grant relief from the 6% GST/HST failure to remit penalty payable before April 1, 2007, under former section 280 and similar penalties that accrued under the non-GST/HST portion of the Excise Tax Act. For these penalties, the Minister may cancel or waive the penalty that accrued within the last 10 calendar years before the year the request is made for any reporting period.
Example
- An initial request made during the 2015 calendar year related to the failure to remit and similar penalties that accrued during the 2005 and later calendar years, for any reporting period, is eligible for consideration. Any penalty that accrued before January 1, 2005, is not eligible for consideration.
The 10-year limitation period rolls forward every January 1.
For GST/HST interest related requests, please see the section above called Interest requests.
Other penalties
For a reporting period that ended within 10 years before the calendar year in which the request is made, the Minister may cancel or waive all or a portion of the:
- failure to file a return penalty payable under section 53 of the Air Travellers Security Charge Act
- failure to file a return penalty payable under section 64 of the Softwood Lumber Products Export Charge Act, 2006
- failure to file a return penalty payable under section 107 of the Select Luxury Items Tax Act
- failure to file a return penalty payable under section 132(1) of the Greenhouse Gas Pollution Act
- failure to file a return penalty payable under sectio 47(1) of the Underused Housing Tax Act
- failure to file a return penalty payable under section 251.1 of the Excise Act, 2001
Example
- An initial request made during the 2015 calendar year related to a failure to file penalty for a reporting period that ended within 10 years before the calendar year in which the request is made is eligible for consideration. A request made for a reporting period that ended more than 10 years before the calendar year in which the request is made is not eligible for consideration.
The Minister may also grant relief from the 6% failure to remit penalty payable before April 1, 2007, under former section 53 of the Air Travellers Security Charge Act. For this penalty, the Minister may cancel or waive the penalty that accrued within the last 10 calendar years before the year the request is made for any reporting period.
Example
- An initial request made during the 2015 calendar year related to the failure to remit penalty that accrued during the 2005 and later calendar years is eligible for consideration.
The 10-year limitation period rolls forward every January 1.
Global Minimum Tax Act (GMTA)
Under the Global Minimum Tax Act (GMTA), the Minister of National Revenue has the discretion to cancel or waive penalties and interest. However, this discretion is subject to a 10-year limitation period.
Penalties
The Minister may cancel or waive a penalty only within 10 calendar years after the end of the fiscal year in which the penalty became payable.
Payment of penalties
A person that is required to pay a penalty under this Act must pay it:
- in the case of a penalty payable under section 98 or 99, on the day on which they are required to file the return or notify the Minister, or
- in any other case, on the day on which the original notice of assessment of the penalty is sent
Penalties under the GMTA
- Failure to file GloBE Information Return (GIR) ss 60(1), (3)(b)(i), 98(1), 104(a)
- Failure to notify Minister qualifying foreign filing entity will file GIR ss 60(4), 60(5)(b)(i), 98(1), 104(a)
- Failure to file GIR after notification ss 60(2)(b), 98(2), 104(a)
- Failure to file Part 2 or 3 return ss 61, 99(1), 104(a)
- Repeated failure to file Part 2 or 3 return ss 61, 62, 99(3), 104(a)
- False statement of omission ss 99(4), 104(a)
- Failure to provide information ss 100, 104(b)
- Unreasonable appeal ss 101, 104(b)
- Avoidance penalty ss 102(2), 104(b)
- General penalty 103, 104(b)
When does the 10-year limitation begin?
The 10-year limitation period begins after the end of the fiscal year, in which the relevant penalty became payable.
Examples
Failure to file a return
- If a company is required to file a return for the first fiscal year beginning on or after December 31, 2023, and ending on or before December 31, 2024, and files late, the deadline to file that return is June 30, 2026Footnote 1 . Therefore, the penalty for failure to file a return for the first fiscal year becomes payable in 2026.
- An initial request for penalty relief related to the first fiscal year beginning on or after December 31, 2023, and ending on or before December 31, 2024, can be considered if the request is made on or before December 31, 2036.
The penalty becomes payable in the fiscal year the return was due.
Failure to provide information
- The Minister requested information from a taxpayer in 2024. The taxpayer failed to provide the information by the requested deadline. A penalty for failing to provide information was assessed in 2026 and a Notice of Assessment was issued that year. The penalty became payable in 2026.
An initial request for penalty relief related to the 2024 fiscal year can be considered if the request is made on or before December 31, 2036. The penalty becomes payable in the fiscal year when the Notice of Assessment (NoA) is sent.
Interest
The Minister may also cancel or waive interest. However, the limitation period is calculated differently than for penalties.
The 10-year period limitation begins after the end of the particular fiscal year in which the original tax debt was required to be paid—not when the interest was assessed or began to accrue.
Example
Interest related to a tax debt
- A company has a tax debt in 2024. Interest arises in 2025 in respect of the 2024 fiscal year.
An initial request for relief for the interest that arose in 2025 related to the tax debt for the 2024 fiscal year can be considered if the request is made on or before December 31, 2034.