How many years can you go without filing taxes in Canada?

Image of Canadian tax forms

The number of years you can go without filing taxes depends on many things! Because there are so many factors involved, it’s difficult to give a precise answer. However, if you haven’t filed taxes in a while, there are some things you need to know about what happens next.

You can go back and file for previous years, but you will be penalized. You will be charged compound daily interest starting May 1st of the first year you missed paying taxes. This rate might change every three months depending on prescribed interest rates.

However, if you continue to not file taxes at all, the government won’t help you out down the road. You won’t receive any benefits from programs like Old Age Security or Employment Insurance because these programs require proof that someone’s income is being taxed in order for them to collect their benefits.

Canada Revenue Agency

The CRA will likely require additional information when they notice an absence in their system if your income falls under one of these categories:

  • self-employment (including owning rental property)
  • employment income from outside Canada
  • non-residency status in Canada during some number of past years.

The CRA has a statute that says they can’t penalize someone who hasn’t filed tax returns in three years if they didn’t know about the requirement to file. This means that if you had no idea you were supposed to be filing taxes, then the government won’t penalize you for not filing for three years (although this does not mean that there won’t be consequences).

Based on our experience with clients who have failed to file their tax returns after having been notified by CRA mailings/phone calls over an extended period (typically 2-3 years), we’ve found that most have a hard time getting away with not paying penalties as there is a great deal of evidence stacked against them.