The Canada Revenue Agency (“CRA”) has issued these new Memoranda to replace previous GST Memoranda 500-3-2, “Penalties and Interest” and 500-3-2-1, “Cancellation of Waiver of Penalties and Interest”, dated March 1994. The CRA has confirmed that a wash transaction occurring after April 1, 2007 that is subject only to the new prescribed interest rate and not the 6% penalty and interest, is eligible for wash transaction relief. Interest in excess of 4% of the tax not properly collected will be waived or cancelled on qualifying wash transactions.
CRA Memoranda 16.3
“Penalties and Interest” and 16.3, “Cancellation of Waiver of Penalties and/or Interest”