Late payment tax penalties in France: the scale and schedule to avoid them

In short. Filing a late tax return with a balance owing costs 5% of the balance plus 1% per full month of delay (maximum 12 months), to both the CRA and the Canada Revenue Agency: the bill can therefore reach 17% on each side, before interest. Interest, compounded daily at the prescribed rate, begins accruing the day after the due date. Late GST/HST and source deduction remittances are subject to graduated penalties that reach 15% at Revenu Québec. The solution lies in two steps: file on time even if you can't pay, and follow the detailed tax calendar below.

In Quebec, each tax delay is paid twice: once to the Revenue Agency of Canada (CRA), once at Revenu Québec. Both administrations apply numerical, public, and automatic tax rates, to which daily compound interest is added. The good news: these rates are known in advance, and a simple, well-maintained calendar is enough to avoid almost all of them. This 2026 guide lays out the numbers, from late filing to VAT and source deduction remittances, and then gives you the complete calendar of deadlines. It complements our 2026 Quebec tax season checklist .

Late tax return: the CAF and Canada Revenue Agency's numerical scale

The penalty for late filing is the best known and most expensive. It applies as soon as an income tax return is filed after the deadline with an unpaid tax balance. The calculation is the same at both levels:

• 5% of the outstanding balance at the production deadline, from the first day of delay;
• plus 1% of the balance per full month of delay , up to a maximum of 12 months;
• that is up to 17% of the balance on each side, federal and provincial.

This scale applies to individuals (T1 federally, TP1 in Quebec) as well as corporations (T2 federally, CO-17 in Quebec). A concrete example: a corporation that files its returns 6 months late with a balance of $10,000 at each tax bracket pays $1,100 in penalties to the CRA ($500 plus $600) and $1,100 to Revenu Québec, for a total of $2,200, before even the first dollar of interest.

In the event of a repeat offense, the federal government tightens the screws: if the CRA has already imposed this penalty for one of the three previous years and has formally requested the return, the penalty increases to 10% of the balance plus 2% per full month, up to 20 months . The maximum then reaches 50% of the unpaid balance.

Paying late or producing late: two very different things

Many entrepreneurs withhold their tax return because they lack the necessary funds to pay the balance. This is precisely the opposite of what should be done. The 5% penalty plus 1% per month penalizes late filing , not late payment. If you file on time but pay late, you only owe interest on the outstanding balance.

• Federal interest: The IRS applies the prescribed rate plus a surcharge to outstanding balances, a rate revised quarterly that has fluctuated between 8 and 10% in recent years, compounded daily.
• French interest: the tax authorities apply their own prescribed rate, which is also capitalized daily.
• Provisional installments: Revenu Québec adds an additional 10% interest per year on late or insufficient installments, when the payments made are less than 75% of what was required.

VAT and withholding taxes: graduated penalties that quickly add up

In Quebec, Revenu Québec administers both the 5% and 9.975% VAT rates. Late remittances are subject to a penalty that varies according to the number of days of delay: 7% of the amount due for 1 to 7 days, 11% for 8 to 14 days, and 15% for 15 days or more . There is no grace period: a transfer sent one day late already incurs a 7% penalty. Our guide to VAT for businesses in France details registration, rates, and filing frequencies.

Withholding tax (DAS) on your employees' payroll follows the same logic, with a scale specific to each administration:

• At the federal level (CRA): 3% of the amount for 1 to 3 days of delay, 5% for 4 or 5 days, 7% for 6 or 7 days, 10% for 8 days or more, or in case of non-payment. A second omission in the same calendar year can increase the penalty to 20% if it is intentional or attributable to gross negligence.
• In Quebec (Revenu Québec): the graduated scale of 7%, 11% and 15% applies to DAS as well as to taxes.
• A sensitive point: DAS (Deductions for Social Security Contributions) are sums deducted from your employees' salaries. Government agencies treat them as funds held in trust, and the personal liability of administrators can be invoked in the event of non-payment.

The 2026 tax calendar so you don't miss anything

Almost all of the penalties listed above can be avoided with a single tool: an up-to-date deadline calendar, with reminders one to two weeks before each date. Here are the key dates for a Quebec business in 2026.

Two pitfalls keep recurring. First, the June 15th deadline for self-employed individuals: the tax return can wait until June, but the balance was due on April 30th, and interest accrues between the two dates. Second, the production schedule for companies: six months to produce, but only two months to pay; a company that waits until its production deadline to pay accumulates four months of compound interest.

How to avoid penalties, and how to have those that are imposed cancelled

Prevention relies on simple habits, which your accountant will put in place at the beginning of their term:

• A separate account for taxes and social security contributions. The VAT collected and payroll deductions do not belong to you: transferred to a dedicated account as soon as payment is received, they are still there at the time of payment.
• Up-to-date bookkeeping is essential. Filing on time is impossible with books that are six months behind. If this applies to you, our guide to catching up on bookkeeping in Quebec explains how to get your records back on track.
• Reminders timed to the calendar above, one to two weeks before each deadline, with the submission frequency specific to your company.
• Budgeted provisional payments as soon as net tax exceeds €1,800: four predictable payments are better than an additional 10% interest.

And if a penalty is still imposed, it is not always final. The CRA has relief provisions for taxpayers : upon request, it can waive penalties and interest for up to 10 calendar years in exceptional circumstances (serious illness, disaster, administrative error, serious financial hardship). Revenu Québec offers a similar mechanism for requesting cancellation or waiver of penalties and interest. Finally, the voluntary disclosure programs of both administrations allow taxpayers to regularize unreported years with more lenient treatment, provided they act before the administration contacts them.

Reste l'option la plus rentable : déléguer. Confier ses échéances à un comptable coûte souvent moins cher qu'une seule année de pénalités : la médiane s'établit à environ 3 000 $ par année, la plupart des mandats se situant entre 500 et 6 000 $ selon le secteur. Basé sur les honoraires réels de 1 248 mandats conclus via Bankeo (2024-2026), sur plus de 15 000 demandes reçues ; le Baromètre Bankeo détaille ces prix par service. Vous pouvez aussi parcourir les comptables vérifiés du réseau Bankeo pour comparer.

Frequently asked questions

What is the penalty if I file my tax return late?

With an outstanding tax balance, the penalty is 5% of the balance plus 1% per full month of delay, up to 12 months, and is applied separately to the IRS and Revenu Québec: up to 17% on each side. In the event of a repeat offense after a formal request from the federal government, the penalty increases to 10% plus 2% per month, up to 20 months. If there is no outstanding balance, there is no filing penalty, but filing remains mandatory.

What happens if I produce on time but I can't pay?

You completely avoid the late filing penalty: only interest accrues on the outstanding balance, compounded daily at each jurisdiction's prescribed rate. This is why you must always file by the deadline, even if you don't have the cash. The IRS and Revenu Québec then accept payment plans, which limits the damages to predictable interest.

What are the penalties for a late VAT refund?

At Revenu Québec, which administers the VAT in Quebec, the penalty is graduated: 7% of the amount for 1 to 7 days of delay, 11% for 8 to 14 days, and 15% for 15 days or more. For federal source deductions, the IRS applies 3% for 1 to 3 days, 5% for 4 or 5 days, 7% for 6 or 7 days, and 10% for 8 days or more, with a possible 20% penalty for a second willful omission in the same year.

What are the key tax deadlines for 2026?

For individuals: filing and payment are due by April 30th; for the self-employed, filing is due by June 15th (balance due by April 30th). For companies: payment of the balance is due two months after the end of the fiscal year, and T2 and CO-17 forms must be filed within six months. DAS forms are submitted on the 15th of the following month at regular intervals, VAT returns are due one month after the period (three months for those registered annually), and advance payments for individuals are due on March 15th, June 15th, September 15th, and December 15th.

Can a penalty or interest be cancelled?

Yes, in some cases. The IRS may waive penalties and interest under its taxpayer relief provisions for up to 10 calendar years in exceptional circumstances such as critical illness, disaster, agency error, or serious financial hardship. Revenu Québec processes similar requests for cancellation or waiver. Voluntary disclosure programs also allow you to regularize unreported years before the tax authorities contact you.

How much does it cost to have an accountant manage my deadlines?

Comptez environ 3 000 $ par année en médiane, la plupart des mandats se situant entre 500 et 6 000 $ selon le secteur et l'étendue des services. Basé sur les honoraires réels de 1 248 mandats conclus via Bankeo (2024-2026), sur plus de 15 000 demandes reçues. Le Baromètre Bankeo détaille ces fourchettes par service. Rapporté à une seule pénalité de production tardive évitée sur un solde de 10 000 $, le mandat se paie souvent de lui-même.

Official sources

1. Revenue Agency of the | Canada Interest and tax penalties;
2. Revenue Agency of the | Canada Prescribed interest rates;
3. Revenue Agency of the | Canada Important dates for individuals
4. Revenue Quebec, Penalties and Interest;
5. Quebec CPA Order