Is there a separate penalty just for filing Schedule 29 late?
The schedule is part of the corporation's return, so the first place to look is the late-filing penalty on the return itself. For the 2025 tax year that is 5% of the balance owing plus 1% for each full month the return is late, to a maximum of 12 months. A higher rate applies on a narrower trigger, which is a separate question and is not reached simply by filing late again. Either way the charge attaches to the return and not to the schedule. The real exposure on a missing schedule sits behind it, in the payments to non-residents that went unreported and in the withholding those payments should have carried.
We filed the T2 on time but left out Schedule 29. What now?
Prepare the schedule for the year it belongs to and file it, rather than waiting to be asked. Because the return itself was on time, the late-filing penalty on the return is not the issue. What the missing schedule exposes is the payments it should have reported and whether the right amount was withheld on them. Reconcile the schedule against the non-resident slips for the same year before it goes in, and deal with any shortfall in withholding at the same time. A correction made unprompted, with the working attached, is a different conversation from an explanation offered after a query lands.
Does the penalty still apply if the corporation owes no tax?
The late-filing penalty for the 2025 tax year is calculated as a percentage of the balance owing, so where the balance is nil the percentage produces nothing. That is not the same as no consequence. The schedule reports payments made to non-residents, and the withholding on those payments is a separate obligation that does not depend on the corporation's own tax position. A loss-making or dormant corporation that paid a royalty or a management fee abroad can carry a real exposure on the withholding while its return shows nothing payable. Look at the payments, not at the bottom line of the return.
Does the penalty double if we also filed late last year?
No, and the trigger is narrower than most people expect. The higher rate applies where the CRA issued a demand to file and charged a late-filing penalty in any of the three preceding tax years. Both limbs matter: filing late again, on its own, does not put the corporation there. Where the higher rate does apply, for the 2025 tax year it is 10% of the balance owing plus 2% for each full month, to a maximum of 20 months. That is not a doubling of the ordinary charge. The flat rate and the monthly rate double, but the ceiling moves from 12 months to 20.
Does interest run on the penalty as well as the tax?
The penalty itself does not compound. Interest compounds daily on the unpaid balance, which is why a late corporate filing with tax owing keeps getting more expensive after the penalty has reached its ceiling. The practical consequence for a corporation dealing with a missing schedule is that paying down the balance and completing the filing are two separate levers, and they can be pulled in either order. Where the balance is in dispute, settle the filing first. The schedule and the non-resident slips telling the same story is what usually shortens the correspondence that follows.
Can we file missing Schedule 29 years before the CRA contacts us?
Yes, and the order of events matters. Approaching the CRA with the schedules prepared, the non-resident slips reconciled and the withholding position reviewed puts the corporation somewhere materially different from answering a letter about the same gap. Work out first what the payments were and what was withheld, because that is the question the schedule prompts. Filing the schedule on its own can simply make a withholding gap visible without addressing it. Bring the affected years forward together rather than one at a time, so the story the filings tell is consistent across all of them.
How is tax residency decided?
By facts, not by citizenship or the address on your post. Canada weighs your ties — a home available to you, spouse, dependants, then secondary ties like accounts and licences. The US adds a mechanical day-count test alongside its green-card test. India counts days present under its own thresholds. Where two countries both conclude you are resident, the treaty tie-breaker decides one residence: permanent home, then centre of vital interests, then habitual abode, then nationality. See tax residency.
How do I get back tax withheld in another country?
By the route that country provides, and it is rarely automatic. Where an elective return is available — on rent or pension income, for instance — filing it recomputes the tax on net income and refunds the difference. Where it is not, you file a refund claim with the withholding authority, supported by evidence of your residence and entitlement to the treaty rate. Both take time, which is why fixing the rate before payment is worth more. See withholding refund and recovery.
