CRA Releases, March 1, 2005
September, 2004 - CRA introduces an update to Interpretation Bulletin IT-104R3 - Deductibility of Fines or Penalties. The 2004 Budget proposes that fines or penalties imposed by federal, provincial or municipal governments in Canada or by a foreign country are not deductible. However, penalty and interest imposed under the Excise Act, the Air Travellers Security Charge Act and the GST/HST portions of the Excise Tax Act will continue to be deductible. Also, there will be Regulations which will exclude certain prescribed fines and penalties. Penalties charged pursuant to contracts (e.g., penalties for late performance) will continue to be deductible if they meet the general rules under the ITA. This applies to fines and penalties after March 22, 2004.
For further information see VTN Monthly Tax Update Seminar, Issue No. 279.
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