What is the late filing penalty for GST/HST registration?

The registration itself is not the thing that gets penalised. The cost of being late sits in the reporting periods that should have been filed and in the tax that should have been charged: once a business is required to be registered, tax on those supplies is its liability whether or not it collected anything from the customer. That is the exposure to model first. Interest runs on the unpaid amounts and compounds daily. The practical question is how far back the obligation reaches, which is a facts question about the supplies.

This is the part that surprises people. Where a business was required to be registered, the tax on its supplies for those periods is its own liability, and whether it added tax to its invoices does not change that. Recovering it from customers after the event is a commercial matter and often is not possible. Establishing the correct registration date therefore matters more than anything else in the file, because that date fixes how many periods carry the liability. Do it from the contracts and sales records before filing.

The figures widely quoted are the CRA late-filing penalty on a return filed late with a balance owing. For the 2025 tax year that is 5 per cent of the balance owing plus 1 per cent for each full month the return is late, to a maximum of twelve months, rising to 10 per cent plus 2 per cent per month to twenty months where the CRA issued a demand to file and charged a late-filing penalty in any of the three preceding tax years. None of it is charged on a registration, which is why a late non-resident file is priced from the uncollected tax instead.

A demand to file matters for more than its deadline. It is one of the two conditions for the higher late-filing rate on a late return with a balance owing: for the 2025 tax year, 10 per cent of that balance plus 2 per cent for each full month, to a maximum of twenty months, and only where a late-filing penalty was also charged in any of the three preceding tax years. Being late repeatedly is not by itself the trigger. On a non-resident file, establish which accounts and periods the demand covers first.

Back to when the obligation arose, which is decided by the supplies rather than by the day somebody noticed. That date is reconstructed from sales records by customer location, the terms under which goods or services were delivered, and, for a platform, who was treated as making the supply. Once the date is fixed the periods follow from it mechanically. Getting it right in both directions is the work: too early and periods are filed that were never due, too late and the file invites a question already answered wrongly.

It depends which registration route the business is on, and that is decided at registration rather than afterwards. One route is simpler to operate and gives no input tax recovery at all; full registration opens recovery on Canadian costs. A business with real Canadian expenditure that registers late on the simpler route can end up paying tax on its supplies with nothing to set against it. So the route decision and the back-period exposure are one calculation rather than two, and the arithmetic belongs before the registration is filed.

By default the payer or agent withholds a flat rate on the gross rent and remits it, with no deduction for mortgage interest, taxes or repairs. Electing under section 216 lets you file on the net rental result instead, which for most properties recovers a substantial part of what was withheld; an NR6 undertaking filed before the year starts lets the withholding itself be computed on net rather than gross. See the section 216 return.

There is no single period that settles it. Canada looks at whether your ties were actually severed, not at a day count; the United States taxes citizens regardless of where they live; India applies day-count thresholds with a second limb reaching back over earlier years. Time abroad is evidence, not a rule — what decides it is where your home, family and economic life sit. See tax residency.