Canada Revenue Agency
www.cra.gc.ca
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Penalties and suspensions
| Infraction | First Infraction | Repeat Infraction (Repeated infractions will increase the probability of revocation) |
|---|---|---|
| Late filing of annual information return (T3010) | $500 penalty | $500 penalty |
| Issuing receipts with incomplete information | 5% penalty on the eligible amount stated on the receipt | 10% penalty on the eligible amount stated on the receipt |
| Failure to keep proper books and records | Suspension of tax-receipting privileges | Suspension of tax-receipting privileges |
| Charitable organization or public foundation carrying on an unrelated business | 5% penalty on gross unrelated business revenue earned in a fiscal period | 100% penalty on gross unrelated business revenue earned in a fiscal period and suspension of tax-receipting privileges |
| Private foundation carrying on any business | 5% penalty on gross business revenue earned in a fiscal period | 100% penalty on gross business revenue earned in a fiscal period and suspension of tax-receipting privileges |
| Foundation acquires control of a corporation | 5% penalty on dividends paid to the charity by the corporation | 100% penalty on dividends paid to the charity by the corporation |
| Undue benefit provided by a charity to any person (e.g., a charity makes a cash gift to the director's son) | 105% penalty on the amount of undue benefit | 110% penalty on the amount of undue benefit and suspension of tax-receipting privileges |
| Generally making a gift to an entity other than a qualified donee | 105% penalty on the amount of the gift | 110% penalty on the amount of the gift |
| Issuing receipts if there is no gift or if the receipt contains false information (where the penalties in total do not exceed $25,000) | 125% penalty on the eligible amount stated on the receipt | 125% penalty on the eligible amount stated on the receipt |
| Issuing receipts if there is no gift or if the receipt contains false information (where the penalties in total exceed $25,000) | Suspension of tax-receipting privileges and 125% penalty on the eligible amount stated on the receipt | Suspension of tax-receipting privileges and 125% penalty on the eligible amount stated on the receipt |
| Gifting property to another registered charity so as to delay expenditures on charitable activities | The charities involved are liable to a 110% penalty of the fair market value of the property | The charities involved are liable to a 110% penalty of the fair market value of the property |
| Private foundation has a divestment obligation percentage at the end of its fiscal period in respect of a class of shares. | 5% of the result of multiplying the divestment obligation percentage of the private foundation for the fiscal period by the fair market value of all issued and outstanding shares in that class, except where there is a repeat infraction or another penalty for failure to disclose, as indicated below, that applies for the fiscal period. | 10% of the result of multiplying the divestment obligation percentage of the private foundation for the fiscal period by the fair market value of all issued and outstanding shares in that class at the end of the fiscal period. |
| Private foundation fails to disclose a material transaction in a class of shares at the end of its fiscal period where disclosure is required. | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period. | N/A |
| Private foundation fails to disclose a material interest held at the end of its fiscal period by a relevant person in a class of shares where disclosure is required. | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period. | N/A |
| Private foundation fails to disclose its total corporate holdings percentage at the end of its fiscal period in a class of shares where disclosure is required. | 10% of the result of multiplying the divestment obligation percentage of the private foundation in that class of shares by the fair market value of all issued and outstanding shares in that class for the fiscal period. | N/A |
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