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Important Canadian tax updates – Filings and disputes

Author(s): Monica Biringer, Mark Brender, Patrick Marley, Maude Lussier-Bourque, Andrew Boyd, Ilana Ludwin, Kaitlin Gray

Mar 18, 2020

Updated March 27, 2020

In an effort to keep you informed of the impact of recent Canadian tax changes (particularly in response to the COVID-19 pandemic), the Osler Tax Group will provide periodic updates of measures announced by the federal and provincial governments with respect to tax reporting, payment deadlines and other compliance issues. In addition, we will provide updates on measures affecting delays, filing requirements and other procedural issues relevant to tax audits and disputes.

Tax filings and payments

The following is a summary of the extensions and relief measures regarding income tax compliance recently announced by the federal government. These measures are intended to relieve some of the financial distress and uncertainties currently experienced by businesses and individuals.

For updates in respect of GST/HST issues, please see our related update, Deferral of GST/HST and QST remittances and customs duty payments.

While we expect that once Parliament resumes its activities, emergency measures legislation will be introduced to deal with the formal extension of deadlines and other announced measures — the information below is based on information currently available to the public.

The Government of Canada announced on March 27, 2020 that certain administrative income tax actions required of taxpayers (including returns, elections, designations and information requests, but excluding payroll deductions payments and all related activities) that were originally due after March 18, 2020, can now be deferred to June 1, 2020. This new announcement does not apply to any deadlines that are otherwise specified, including the deadlines set out below and certain deadlines for partnership and NR4 returns.

Individuals

For individuals, the filing due date for 2019 personal tax returns is deferred from April 30, 2020 to June 1, 2020.

The deadline to pay any income tax amounts, including tax balances due, as well as instalments, that become owing on or after March 18, 2020 and before September 2020 is deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this period.

Trusts

For trusts with a taxation year end on December 31, 2019, the filing due date for income tax returns is deferred from March 31, 2020 to May 1, 2020.

The deadline to pay any income tax amounts, including tax balances due, as well as instalments, that become owing on or after March 18, 2020 and before September 2020 is deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this period.

Corporations

For corporations, the filing due date for corporate income tax returns has not been deferred.

The deadline to pay any income tax amounts, including tax balances due, as well as instalments, that become owing on or after March 18, 2020 and before September 2020 is deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this period.

The Canada Revenue Agency (CRA) announced that it will not contact any small or medium (SME) businesses to initiate any new GST/HST or income tax audits for the next four weeks.

The Canada Revenue Agency also announced that it will temporarily suspend interaction with taxpayers and representatives for audits already in progress for the vast majority of businesses.

Charities

On March 27, 2020, the Government of Canada announced that the filing deadline for all charities with a Form T3010, Registered Charity Information Return due between March 18, 2020 and December 31, 2020 is extended to December 31, 2020.

Objections

On March 27, 2020, the Government of Canada announced that the deadline for any objection originally due between March 18, 2020 and June 30, 2020 is now June 30, 2020. Objections that have previously been filed (other than those related to entitlement to credits and benefits) are being held in abeyance, with no collection actions being taken at this time.

The following outlines some suggestions for filing notices of objection with the Canada Revenue Agency in the coming months.

If you receive or have received a reassessment or notice of determination to which you intend to object, consider filing your notice of objection well in advance of the June 30, 2020 deadline in case there are disruptions to mail and courier services.

It is always preferable to file the notice of objection using two different methods. Currently, and in order of preference, we would suggest using two of the following three methods for filing your objection:

  1. e-filing through the CRA’s online My Business Account;
  2. registered mail; or
  3. courier

If you have not yet registered with the CRA’s My Business Account, consider doing so at this time in anticipation of possible disruptions to mail and courier services. Please note that it can take some time for the registration to be processed.

If you are having difficulty registering with My Business Account, we may be able to e-file the objection on your behalf if given sufficient notice (at least two weeks before the filing deadline). Please do not hesitate to reach out to us if you are interested in this option.

If none of the suggested methods of filing (e-filing, registered mail and courier) are available, please contact us immediately so that we can assist you in finding an alternative filing method.

If you miss the June 30, 2020 deadline, please contact us immediately so that we can assist you in preparing a request to extend the filing deadline. We recommend keeping track of all efforts to file before the deadline and the reasons you were unable to file in time, as that will assist us in preparing a request to extend. Please note that the request must be submitted within one year of the original deadline and preferably as soon as possible after the original deadline.

The necessary information published by the Department of Finance Canada and the Government of Canada regarding the impact of the COVID-19 pandemic can be found at the following links:

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