COVID-19 and Corporate Tax Filings

 In Business Law

Federal Government

On March 18, 2020, the Government of Canada announced the details of its COVID-19 Economic Response Plan. Included in the measures announced to support Canadian businesses was additional flexibility with respect to corporate tax filings.

Canadian businesses will be able to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18, 2020 and before September, 2020. This relief will apply to tax balances due and installment payments. No penalties or interest will apply.

In addition, the Canada Revenue Agency will recognize electronic signatures as having met the signature requirements of the Income Tax Act to reduce the need for in person meetings between taxpayers and tax preparers.

CRA has also suspended collections activities on new debts until further notice, and will allow flexible payment arrangements, including entertaining requests to cancel penalties and interest. CRA will address pre-existing situations on a case-by-case basis.

Further, CRA will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next four weeks. CRA will also temporarily suspend audit interaction unless the legal deadline to reassess is approaching.

Objections related to benefit and credit entitlement will continue to be processed, however objections to other tax matters filed by individuals and businesses will be held in abeyance.

More information on the COVID-19 Economic Response Plan can be found here.

More information on the COVID-19 Economic Response Plan Collections, Audits and Appeals can be found here.

Form RC4288 Request for Taxpayer Relief can be found here.

Ontario

On March 25, 2020, the Ontario government announced the details of Ontario’s Action Plan; Responding to COVID-19, which includes payment deferral and other initiatives for businesses.  The initiatives include, but are not limited to:

  • Five months of interest and penalty relief against the filing and payment of most provincially administered taxes, including Employer Health Tax, Tobacco Tax and Gas Tax.
  • Up to six months deferral of WSIB payments.
  • Proposed temporary increase to the Employer Health Tax exemption from $490,000 to $1,000,000 for 2020.
  • The introduction of a new corporate income tax credit, the Regional Opportunities Investment Tax Credit, for regions experiencing low employment growth.

The province also announced an increase to its electricity cost relief programs for 2020-2021.

More information on Ontario’s Action Plan; Responding to COVID-19 can be found here.

This blog post was written by Jade Renaud, a member of the Business Law team.  Jade can be reached at 613-369-0373 or at jade.renaud@mannlawyers.com.

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