In order to provide businesses relief and support during the COVID-19 outbreak, the Canada Revenue Agency (CRA), will allow all businesses to defer, until after August 31, 2020, the payment of any income taxes owed to the government. This relief would apply to tax balances due, as well as installments. No interest or penalties will accumulate on these amounts during this period.
Additional CRA measures are as follows:
The 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. The CRA will also temporarily suspend audit interaction with taxpayers and representatives for most businesses as well.
As a courtesy, the Liaison Officer service will also be available via phone during this period, to help owners of small businesses in understanding their tax obligations. This service will be customizing information during these challenging times by ensuring small businesses are aware of any changes such as filing and payment deadlines, proactive relief measures, etc.
The government is reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings.
This will provide flexibility to seniors who are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements. Similar rules would apply to individuals receiving variable benefit payments under a defined contribution Registered Pension Plan.
The government has announced the first phase of its response intended to support businesses in Canada in the wake of the COVID-19 outbreak. This includes the following key proposals:
- A three-month temporary wage subsidy for certain small employers. The subsidy is equal to 10% of remuneration paid during that period, up to a maximum of $1,375 per employee and $25,000 per employer. Eligible employers include corporations eligible for the “small business deduction,” as well as non-profit organizations and charities. Eligible employers can benefit immediately by reducing their remittances of income tax withheld on their employees’ remuneration.
- All businesses can defer until after August 31, 2020 the payment of income tax payments (installments and balances due under Part I of the Income Tax Act) that become owing between now and before September 1, 2020. No interest or penalties will accumulate on these amounts during this period. Note that the filing deadline for corporate tax returns will not change—it remains no later than six months after the end of the taxation year.