May 20, 2020

About the Author

  • Leo E.K. Palay

    Leo works with both established private businesses and startup businesses in order to maximize tax efficient growth and protect the interest of the founders every step of the way.

    lekp@tdslaw.com
    (204) 934-2576

  • Stephen A. Porco

    Stephen practices in the areas of corporate and commercial law and taxation, with a focus on corporate reorganizations and tax planning.

    sap@tdslaw.com
    (204) 934-2350

The Government of Canada has released its detailed economic response plan to the COVID-19 outbreak. (Update: May 21)

 

 

(Update: May 21): Included in this plan are the following measures relating to taxation and the Canada Revenue Agency (“CRA”): 

The Government of Canada has provided a plan, including the following measures relating to taxation.

 

Filings

  • All taxpayers may defer the payment of any income tax amounts that would become owing on or after March 18, 2020 and before September 1, 2020 (applicable to Part I of the Income Tax Act(Canada)) until after August 31, 2020.
  • Filings for individuals (other than trusts): due date for filing is deferred until June 1, 2020. 
  • Filings for corporations: due date for filing is extended to June 1, 2020 for those corporations that would otherwise have a filing due date after March 18, 2020 and prior to June 1, 2020.
  • Filings for self-employed and their spouses/common law partners: No changes (June 15, 2020).
  • Filings for trusts: trusts having a taxation year ending on December 31, 2019 will have a filing due date of May 1, 2020. Trusts that would otherwise have a filing due date in April or May of 2020 will have a filing due date of June 1, 2020.
  • Filings for partnerships and non-residents: filing due date of May 1, 2020.
  • Filings for charities: T3010 filing due date is extended to December 31, 2020 for charities that have a T3010 form due after March 18, 2020 and prior to December 31, 2020.

 

Tax Disputes

Collections: Collection activities on new debts are suspended until further notice. 

Audits, Objections and Appeals: 

  • The CRA will suspend audit interactions with the “vast majority of taxpayers”. 
  • Any objections relating to a Canadian’s entitlement to benefits and credits will continue. All other objections are being held in abeyance.
  • All Tax Court of Canada sittings that were scheduled between March 16, 2020 until July 3rd, 2020 are cancelled and the Courts are closed until further notice.

Subsidies and Credits: 

  • 75% Wage Subsidy: Eligible employers shall be entitled to a 75% subsidy on wages paid (subject to certain restrictions, including a maximum benefit of $847 per week for each employee), effective March 15, 2020 through June 6, 2020. An eligible employer for the purposes of this 75% subsidy includes (but is not limited to) individuals, taxable corporations, non-profit organizations and registered charities, as well as partnerships of which at least 50% of the fair market value of the partnership interest is held by eligible employers, which have suffered a decrease in revenue from the same month in the previous year of at least 15% for their revenue in march and 30% for the remaining eligible periods. The claiming period for subsidy eligibility in March, 2020 ends on April 11, 2020. The claiming period for subsidy eligibility in April, 2020 is from April 12, 2020 to May 9, 2020. The claiming period for subsidy eligibility in May, 2020 is from May 10, 2020 to June 6, 2020.
  • 10% Wage Subsidy: Eligible employers for the purposes of this subsidy includes individuals (other than trusts), certain partnerships, non-profit organizations, registered charities or small business corporations) that have an existing business number and payroll proram account with the CRA on March 18, 2020 and pay salary, wages, or taxable benefits to employees between March 18, 2020 and June 19, 2020. Eligible employers are entitled to a subsidy equal to 10% of wagespaid from March 18, 2020 to June 19, 2020, up to $1,375 for each eligible employee and up to a maximum of $25,000 per employer. Partnerships may be considered an eligible employer if their members consist exclusively of eligible employers. Any amount claimed under this 10% wage subsidy would reduce the claimable amount under the 75% wage subsidy.
  • Deferral of GST/HST remittances: Businesses may defer until the end of June, 2020 any GST/HST payments or remittances that become owing on or after March 27, 2020 and before June, 2020. No interest will apply if payments or remittances are made by the end of June, 2020.
  • Canada Emergency Response Benefits (“CERB”): The CERB is a taxable benefit of $2,000.00 per month, to be paid out by the Federal government,to individuals that apply, who are: at least 15 years of age, resident in Canada, not working because of COVID-19, and had (self-)employment income of at least $5,000 in 2019 or in the 12 months prior to the date of the application. On their first application, individuals must not expect to earn over $1,000 in (self-) employment income for at least 14 days in a row during the four-week period. For a subsequent period, individuals must not expect to earn $1,000 during the entire four-week period. The CERB is open as of April 6, 2020. The CERB is available from March 15, 2020 to October 3, 2020 with an application deadline of December 2, 2020.
  • Canada Child Benefit (“CCB”): The Government is proposing to increase the maximum annual CCB payments by $300 per child for the 2019-2020 year. The maximum amount of the CCB will be increased for the 2020-21 benefit year to $6,765 per child under age 6, and $5,708 per child aged 6 through 17.

 

Manitoba Finance

  • Income tax filing and payment: Deadlines for payment and filing of provincial income tax will be deferred to August 31, 2020.
  • RST: Retail sales tax returns for small and medium businesses with monthly remittances of up to $10,000 per month that would normally be due on April 20, 2020 and on May 20, 2020 are due on June 22, 2020. Businesses that file for RST on a quarterly basis are due on April 20, 2020 are now do on June 22, 2020.
  • Payroll Tax: Health and Post Secondary Education Tax Levy returns for small and medium businesses with monthly HE Levy remittances of no more than $10,000 per month that would normally be due on April 15, 2020 and May 15, 2020 will now be due on June 15, 2020.

 

All of the above Federal and Provincial relief provisions are constantly changing. Please contact the TDS Tax department for more information or to see if you or your business qualifies for any of the relief or for any other assistance.

Please contact the TDS Tax department for more information or to see if you or your business qualifies for any of the relief. For additional information, please contact Leo Palay via email at lekp@tdslaw.com or call him at (204) 935-2576. You may also contact Stephen Porco via email at sap@tdslaw.com or call him at (204) 934-2350. 


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