Weekly Tax Tips
File Your Trust Tax Return on Time
5 March 2010
To avoid paying penalties, trustees must ensure that they file a trust's tax return by the filing deadline. If you fail to file on time, a penalty of 5% of the unpaid tax is due. A further penalty of 1% of the unpaid tax times the number of months the return is not filed (to a maximum of 12 months) will also be due if the return remains unfiled. Even if the trust does not have a balance owing, the trust return is also an information return. That means that if the trust return is not filed on time, or any of the information slips are not distributed on time, a penalty of $25 a day for each day they are late, from a minimum of $100 to a maximum of $2,500, for each failure to comply with this requirement can be charged.
The filing deadline for trust returns with a December 31, 2009 year-end (which includes all inter-vivos trusts) will be March 31, 2010.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of 5 Mar 2010.
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