THE EMPLOYERS GUIDE TO COVID-19: TAX DEFERRALS
This post is the second of a five part series detailing the programs made available to employers by the Canadian Federal Government in response to the COVID-19 crisis. These programs are organized in the following categories:
Avoiding Layoffs and Rehiring Employees
Deferred Payments
Access to Credit
Supporting Financial Stability
Support for Self-Employed Individual
As the COVID-19 crisis rapidly evolves, so does the Federal Government’s response. We will make every effort to update this page with new information as it is announced. All information included below is accurate as of the date of posting.
In this post, we will be explaining what you need to know about the key programs offered under the Deferred Payments category.
This category has two sections:
1. More time to pay income taxes, and;
2. Deferral of Sales Tax Remittance and Customs Duty Payments until June, 2020.
1. More time to Pay Income Taxes:
The Federal Government of Canada is allowing all businesses to defer the payment of any income tax amounts that become owing on or after March 18th, 2020 and before August 31st, 2020 until September 1st, 2020.
This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)), which includes all taxable income earned by both residents and non-residents in Canada. No interest or penalties will accumulate on these amounts during the above identified period.
A list of current income tax payment due dates for employers and employees alike is accessible here.
Furthermore, a taxpayer who is not able to pay their outstanding income taxes or file a return as a result of the COVID-19 crisis may request a cancellation of any interest charged on the amounts owing or penalties charged to their account.
Businesses who would benefit from a reduction in the amount of federal taxes they are required to remit to the Canada Revenue Agency (“CRA”) may qualify to do so through the Temporary 10% Wage Subsidy. For more information on the program, including eligibility requirements, please click here to see our post.
Every individual’s situation is unique. For more information on your particular situation, please contact us.
2. Deferral of Sales Tax Remittance and Customs Duty Payments until June 2020:
Businesses (including self-employed individuals) are currently permitted to defer the payment of their GST/HST remittances and customs duty owing on imports until June 30th, 2020. This means that any GST/HST payment that becomes owing from March 27th, 2020 until May 31st, 2020 can be deferred until June 30th, 2020.
For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May 2020.
It is important to note that the deadline for businesses to file their returns is unchanged. The CRA is encouraging businesses to file their returns online if possible, as paper (mail-in) returns will not be processed until regular processes resume.
Businesses who file online and are eligible to receive a return can still receive their return during the pandemic, provided that their return does not require client contact or additional review. This is one incentive for businesses to file online, along with avoiding future headaches. However, for those who do not file online, the CRA has stated that it will not impose penalties on late returns provided that they are filed by June 30th, 2020.
The content of this article is not legal advice or a legal opinion and is intended to provide general information on the subject matter. For more information about your specific circumstance, please contact us at 514-842-9994 or email us at mnb@bergmanlawyers.com. You should always consult a lawyer concerning any legal matter.
Bergman & Associates provides a diversified practice, which encompasses the spectrum of corporate, transactional, litigation and regulatory matters. © 2020 by Bergman & Associates. All rights reserved.
Authors:
Michael N. Bergman, lawyer and principal, Bergman & Associates.
Rachel R Renaud, Student-at-law