After indicating that “interest charged on an unpaid balance of property taxes will be deductible if the property taxes themselves are deductible,” CRA indicated regarding a tardiness penalty of 0.5% per month of the unpaid taxes added by a municipality pursuant to s. 250.1 of the Act respecting municipal taxation ("AMT"):
[S]ection 67.6 … prohibits the deduction in computing income of any penalty imposed under the laws of a country or a political subdivision thereof. A penalty imposed under section 250.1 of the AMT therefore comes within this provision and cannot be deducted in computing business income.