COVID-19 : Canadian Tax Measures

Individuals

The April 30th filing deadline for the 2019 taxation year was extended to June 1, 2020. This extension also applies to form T106, T1135, and any elections, forms and schedules that must be filed with the return.
The deadline for the payment of any balance of tax for the 2019 taxation year as well as the June 15 and September 15, 2020 installment payments has been extended until September 30, 2020. No late-filing penalties or interest will be applied if returns are filed and payments are made by September 30, 2020.
For Quebec, the same extensions will apply to payments for QPP, QPIP, HSF and the Quebec drug insurance plan.
The minimum required withdrawals from RRIFs will be reduced by 25% for 2020.
A one-time non-taxable payment of $600 is being contemplated to individuals who are holders, as of June 1, 2020, of a certificate for the Disability Tax Credit. CRA expects to issue the payments beginning this fall.

The filing deadline for trusts with a December 31, 2019 taxation year was extended to May 1, 2020.
The filing deadline for trusts, otherwise due after March 30 and before May 31, 2020, was extended to June 1, 2020.
The filing deadline for trusts, otherwise due between May 31 and August 31, 2020, has been extended to September 1, 2020. This extension also applies to form T106, T1135, and any elections, forms and schedules that must be filed with the return.
The deadline for the payment of any balance of tax or the payment of installments which would otherwise be due or payable between March 18, 2020 and September 30, 2020 has been extended until September 30, 2020. No late-filing penalties or interest will be applied if returns are filed and payments are made by September 30, 2020.

The filing deadline for corporate income tax returns, otherwise due after March 18, 2020 and before May 31, 2020, was extended to June 1, 2020.
The filing deadline for corporate income tax returns, otherwise due between May 31 and August 31, 2020, has been extended to September 1, 2020. This extension also applies to form T106, T1135, and any elections, forms and schedules that must be filed with the return.
The deadline for the payment of any balance of tax or the payment of installments which would otherwise be due or payable between March 18, 2020 and September 30, 2020 has been extended until September 30, 2020.

The March 31 filing deadline for partnerships was extended to May 1, 2020
The filing deadline for partnership information returns, otherwise due after March 31, 2020 and before May 31, 2020, was extended to June 1, 2020.
The filing deadline for partnership information returns, otherwise due between May 31, 2020 and August 31, 2020, has been extended to September 1, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 1, 2020.

The payments of GST, QST and HST remittances and installments due between March 27 and June 1, 2020 inclusively, as well as the 5% GST on imported goods as well as customs duties, can be deferred until June 30, 2020 without interest or penalties.
There is no deferral for the filing of any of the related returns. However, no penalties will be imposed if they are filed no later than June 30, 2020.
Québec Lodging Tax: The usual April 30, 2020, deadline for the first calendar quarter of 2020 has been extended to July 31, 2020, for both filing the return and remitting the related tax. This means that if you are registered for the tax on lodging, you will have two returns to file by July 31, 2020: one for the first calendar quarter of 2020 and one for the second quarter. Penalties and interest will not be applied if returns are filed and payments are made by July 31, 2020.

CRA and RQ will be accepting electronic signatures on certain tax forms.
The filing deadline for NR4 information returns was extended until May 1, 2020.
The filing deadline for information returns, forms, elections, designations and responses to information requests otherwise due on or after March 18, 2020 and before May 31, 2020, was extended to June 1, 2020.
The filing deadline for information returns, forms, elections, designations and responses to information requests otherwise due between May 31, 2020 and August 31, 2020 has been extended to September 1, 2020. Penalties and interest will not be applied if returns are filed and payments are made by September 1, 2020.
The filing deadline for Registered Charity Information Returns otherwise due after March 17, 2020 will now be December 31, 2020.
Revenue Quebec will accelerate the processing of tax returns for refunds and tax credits.

With travel restricted and people not being able to work from their usual locations, unintended tax obligations may arise in different jurisdictions. This might occur where a U.S. individual visiting Canada at the time the travel restrictions were imposed was not able to return to the U.S. and is now currently working from Canada. In response, the CRA has released guidance on international income tax issues raised by the COVID-19 crisis to alleviate implications for employers and employees, most notably, in regard to the creation of a permanent establishment as well as the determination of residency status of a company and individuals. In general, the CRA recognizes the temporary, rather than permanent, nature of these arrangements. In addition, the CRA is providing temporary reliefs in compliance requirements related to payments made to non-residents for services provided in Canada, as well as disposition of taxable Canadian property by non-residents. This guidance will apply from March 16 to August 31, 2020, at which time the CRA may extend its application if necessary.

Although the CRA suspended audit activities in respect of new audits and requests for information related to existing audits, they have resumed audits and are prioritizing audits that are beneficial to the taxpayer, where taxpayers have indicated there is an urgency to advance an existing audit, audits that are close to completion, where significant tax dollars are in question or where there is suspected fraud and other criminal activity.
Filed Objections are being held in abeyance by the CRA and no collection measures will be taken unless the objection relates to the entitlement to benefits and credits.
The deadline for filing a Federal Notice of Objection that would have been due after March 17, 2020 has been extended until June 30, 2020.
The Federal government has suspended collection activities on new debts until further notice. Flexible payment arrangements will be made available.
Quebec has introduced measures similar to those announced by the federal government in respect of relief granted for tax disputes and debts owing, which are as follows:
- Suspension of audit activities except in cases of suspected fraud.
- No contact of taxpayers, unless it is necessary to issue a refund.
- Extension of the deadline for filing a Notice of Objection, otherwise due after March 13, 2020, to June 30, 2020.
- Suspension of collection activities and receptive to extensions on previously made agreements regarding same.