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Deferral of GST/HST and QST remittances and customs duty payments

Author(s): Alan Kenigsberg, Alain Fournier

Mar 27, 2020

Updated August 7, 2020

For further information on the changes below or other tax matters, please contact one of the authors above or any member of our National Tax Group.

The Canadian government announced on March 27, 2020, that it is deferring GST/HST remittances and customs duty payments to June 30, 2020.

The Québec government and Revenu Québec also announced a similar postponement in respect of QST remittances, also to June 30, 2020.

GST/HST remittance deferral

The GST/HST applies to sales of most goods and services in Canada and at each stage of the supply chain. Vendors must collect the GST/HST and remit it (net of input tax credits) with their GST/HST return for each reporting period.

To support Canadian businesses in the current extraordinary circumstances, the Canadian government announced on March 27, 2020, that it will extend to June 30, 2020, the date by which

  • monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
  • quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
  • annual filers, whose GST/HST return or instalment is due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of their current fiscal year.

The Canadian government did not defer the requirement to file GST/HST returns in respect of these periods. Subsequent to Revenu Québec’s announcement on penalties set out below, the CRA announced that it will not impose penalties for late-filing of GST returns, provided that such returns are filed by June 30, 2020. 

On July 27, 2020, the CRA announced that it is waiving arrears interest on existing tax debts related to GST/HST returns from April 1, 2020 to June 30, 2020. As a result, an existing tax debt will not continue to grow due to arrears interest charges during this period.

QST remittance postponement

The QST applies to sales of most goods and services in Québec in a manner similar to how the GST/HST applies to those sales in participating provinces across Canada.

In order to help businesses in this difficult period, the Québec government announced on March 27, 2020, that businesses may, without interest or penalties, postpone to June 30, 2020 the QST payments in respect of their March, April, and May QST remittances.  

While Québec at first announced that the requirement to file QST returns was deferred, Revenu Québec subsequently announced that returns did need to be filed on time but that late filing penalties would not be imposed on a registrant that files its QST returns for these periods no later than June 30, 2020.    

Notwithstanding that the CRA and Revenu Québec have said that they will not impose late filing penalties, the deadline to file returns is unchanged and the CRA and Revenu Québec are encouraging businesses to continue to file their returns on time to the extent that they are able.  The time at which a return is filed can give rise to consequences other than penalties, such as affecting the limitation period for any potential reassessment.  As such, it is important to seek professional advice about the effects of late-filing a return even given this administrative concession.

B.C. sales tax remittance deferral

The B.C. government has announced that it will defer the deadlines for both payment of tax and filing of returns until September 30, 2020.  The announcement covers the following taxes:

  • provincial sales tax (PST)
  • carbon tax
  • motor fuel tax
  • tobacco tax

In September, businesses will have the option of making a lump-sum payment for all taxes owing, but will still be required to file returns for each reporting period. 

B.C. also announced that certain PST changes in its 2020 budget and scheduled increases in the provincial carbon tax would be postponed until further notice.

Deferral of customs duty and GST for importers

Imported goods by businesses are generally subject to the GST, at a rate of 5%, as well as applicable customs duties, which vary by product and country of origin. While the vast majority of imports enter Canada duty-free, some tariffs remain, especially on consumer goods.

The Customs Act governs the levy and payment of customs duties in Canada. Typically, payments owing for customs duties and the GST on imports are due before the first day of the month following the month in which the statements of accounts are issued. 

The Canadian government announced on March 27, 2020, that it has deferred to June 30, 2020, the payment deadlines for statements of accounts for March, April and May.

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