Tax Measures Under Canada’s COVID-19 Economic Response Plan

Flexibility for Businesses in Respect of Paying and Filing Taxes

The Response Plan contains measures that will allow businesses to defer until September 1, 2020, the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020. Interest and penalties will not be applicable to these unpaid tax balances during this period. This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act (Canada) (the “ITA”).

Generally, corporations (other than certain CCPCs) must pay income taxes owing under Parts I, VI, VI.1, and XIII.1 of the ITA on a monthly basis by the last day of each month. A corporation must also pay the remainder of any Part I taxes within 2 months (or in the case of certain CCPCs, 3 months) after its fiscal year-end. Under this measure, both of these payment deadlines are deferred until September 1, 2020, but only in respect of taxes levied under Part I of the ITA.

The deadlines to file certain categories of tax and information returns have been extended:

  • corporations may defer filing T2 returns otherwise due in June, July or August 2020, to September 1, 2020;
  • trusts having a taxation year ending on December 31, 2019, could defer filing T3 returns until May 1, 2020. The deadlines for trust returns that would otherwise be due in June, July or August in 2020, have been extended to September 1, 2020;
  • partnerships and their members could defer filing T5013 returns until May 1, 2020; and
  • the deadline to file NR4 information returns was extended to May 1, 2020.
  • the filing of information returns under Part XVIII and Part XIX of the Income Tax Act may be deferred until September 1, 2020. No interest or penalty will be assessed during this period. In addition, no penalty will apply for failure to obtain a self-certification on financial accounts opened before January 1, 2021.

Additionally, unless otherwise noted by the CRA, administrative income tax actions required of taxpayers by the CRA due after March 18, 2020 can be deferred until June 1, 2020. Such actions include the filing of:

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