As of March 23rd and 24th, the Federal and BC governments have announced emergency measures to assist individuals and businesses deal with COVID-19 pandemic.
We pride ourselves on helping our clients with all their business challenges. Our partners are available to discuss with you any of the issues you are facing. Please don’t hesitate to reach out to us at any time. We are here to help.
Specific legislation and technical rules have not yet been finalized and, therefore, the following comments are subject to change without notice.
On March 23, 2020, the BC government announced a $5 billion relief plan for residents and businesses located in the province and who are currently being affected by the COVID-19 pandemic.
The measures that will be of interest to business owners are as follows:
Extension of tax deadlines and payments:
The following tax filing deadlines and payments have been deferred to September 30, 2020:
- Provincial Sales Tax;
- Employee Health Tax;
- Motor Fuel Tax;
- Carbon Tax; and
- Municipal and Regional District Tax.
Deferral of certain BC budget measures:
The following measures announced in the BC budget are being deferred indefinitely:
- Expansion of PST registration requirements for Canadian sellers of goods and Canadian and foreign sellers of software and telecommunication services;
- Imposition of PST on sweetened carbonated drinks which was to take effect on July 1, 2020; and
- Scheduled increase to the Carbon Tax on April 1, 2020.
Reduction in School Property Tax:
School property tax for properties included in classes 4, 5 and 6 will be cut in half for the 2020 tax year. This generally includes properties in business and light and major industry classes.
Extension of Tax Filing Deadlines:
Effective March 18, 2020, the Government of Canada has announced the following measures:
- Trust tax return filing deadline has been extended to May 1, 2020 (including Form T1135);
- Personal tax return filing deadline has been extended to June 1, 2020 (including Form T1135); and
- The CRA will accept electronic signatures for any e-file authorization forms on a temporary administrative basis.
Our firm will continue to operate in the ordinary course and ensure our clients’ tax filings are completed before the relevant deadlines. Despite the extension, our goal is to file your return(s) as soon as possible.
The CRA has confirmed the following measures related to the deferral of tax payments:
- Any income tax due on or after March 18, 2020 can be deferred until September 1, 2020 and will be free of interest or penalties; and
- The tax payment extension applies to corporations, individuals and trusts and applies only to regular income tax amounts owing under Part I of the Income Tax Act. It does not apply to GST/HST payments, source deductions or amounts payable under Parts IV, XIII or VI.1.
For most of our clients, the extension of tax payments will apply to most of their taxes owing.
The CRA has announced that any collections activity in respect of new debts will be suspended until further notice. In addition, they will be providing flexible payment arrangements to taxpayers.
Objections and appeals:
The CRA has indicated that any objections or appeals which relate to a taxpayer’s entitlement to benefits and credits are considered a critical service and the CRA will continue with these matters. All other objections will be held in abeyance.
Temporary wage subsidy:
The Department of Finance has announced a three-month wage subsidy for eligible employers. Eligible employers include:
- Canadian Controlled Private Corporations (“CCPCs”) who are eligible to claim the Small Business Deduction;
- Non-profit Organizations; and
- Registered Charities.
For the three-month period, an eligible employer can reduce the withholding tax paid to employees by 10% of remuneration paid to a maximum of $1,375 per employee and $25,000 per employer. The reduction will be treated as if it were paid and will be credited to the withholding tax account.
The subsidy is claimed by either reducing the remittances of federal, provincial or territorial tax or, if not claimed as a reduction of payroll remittances, eligible employers can request that the amount be paid to them at the end of the year or be transferred to their 2021 remittance account.
What has not changed:
- GST and HST payments continue to be payable when due;
- GST and HST returns must be filed by the usual due dates;
- Unincorporated businesses (such as professional partnerships) are not eligible for the wage subsidy;
- Companies not eligible for the Small Business Deduction (due to taxable capital in excess of $15 million) do not qualify for the wage subsidy;
- Partnership tax return due dates;
- Filing date for Form T1134 for foreign affiliates;
- Due date for filing corporate tax returns; and
Tax owing by a corporation with a tax year-end before 2020. The only exception is a CCPC with a year-end of December 31, 2019 and which the Small Business Deduction has been claimed.
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