Late T2 again: when can CRA apply the higher repeat-filing penalty?

Check the demand and prior assessments

CRA's corporation-penalty guidance describes a higher late-filing penalty when a demand to file was issued under subsection 150(2) and a failure-to-file penalty was assessed in any of the three previous tax years. Read the actual demand and assessments with the preparer before deciding which calculation applies.

The higher calculation is 10% of the unpaid tax when the return was due, plus 2% for each complete month late, up to 20 months. Interest and other applicable charges are separate questions.

A hypothetical calculation

Assume CA$10,000 of unpaid tax at the filing deadline, two complete months late and all the higher-penalty conditions met. The illustration is CA$1,000 plus CA$200 for each of those two months, totaling CA$1,400. This is not a customer story or an estimate of your assessment.

Prepare the facts for review

• Identify the corporation and taxation year.
• Keep the demand and any response date.
• Find relevant prior penalty assessments.
• Confirm the actual filing date and balance information.
• Ask the preparer to explain the assessment and next action.

If circumstances may support relief, review the separate CRA request process. Do not assume a relief request completes the missing return or resolves every payment question.

Make the next filing handoff visible

Use Compliance Calendar to separate the T2 filing task from balance payments and instalments. Keep the preparation questions, filing acknowledgement and payment references with the relevant tasks. The calendar does not interpret demands or assess penalties, but its completion records can make the handoff clearer.