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Important Québec tax updates – Filings and disputes

Author(s): Mark Brender, Alain Fournier, Maude Lussier-Bourque, David Wilson

Mar 19, 2020

Updated June 5, 2020

For further information on the changes below or other tax matters, please contact any member of our National Tax Group in the Montréal office.

In an effort to keep you informed of the impact of recent Canadian and Québec 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.

This Osler Update focuses on the measures announced by the Québec government on March 17, 2020, March 18, 2020, March 27, 2020 and May 29, 2020. The measures announced on March 18, 2020 by the Québec government harmonize the postponement of payment deadlines for Québec tax purposes with the changes to the payment deadlines announced by the federal government.

For a summary of the measures recently announced by the federal government, please see our federal Tax Update.

Tax filings and payments

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

On March 27, 2020, Revenu Québec announced that the deadlines for administrative tax actions that would otherwise fall between March 17, 2020 and May 31, 2020 are deferred to June 1, 2020. As a result, Revenu Québec specified that the deadlines for the following actions (among others), which would otherwise fall between March 17, 2020 and May 31, 2020, are extended until June 1, 2020:

  • filing of corporate tax returns,
  • filing of elections under Québec tax legislation and regulations (except elections relating to QST, which are harmonized with rules regarding GST),
  • tax credit requests,
  • submitting answers to information requests made by Revenu Québec, and
  • mandatory or preventive disclosure regarding aggressive tax planning.

On March 27, 2020, the Québec Government also announced that it will accelerate the processing of tax refunds and requests for tax credits intended for businesses.

Revenu Québec further announced on its website that the deadlines for administrative tax actions that would otherwise fall between June 1, 2020 and August 31, 2020 are deferred to September 1, 2020. However, this deferral is not applicable to mandatory or preventive disclosure in respect of aggressive tax planning nor filings already subject to a specific deferral to another specified date.

While it is reasonable to expect that the government of Québec will ultimately introduce legislation formally extending other deadlines, the information in this Osler Update is based on information publicly available at this time.

Individuals

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

The deadline to pay any tax balance for the 2019 taxation year is deferred to September 1, 2020.

The deadline to pay instalments for the 2020 taxation year that are usually required to be paid by individuals no later than June 15, 2020 is deferred to September 1, 2020.

The rules governing the calculations to determine the amount of the tax instalments normally due on June 15, 2020 and the amount of the tax instalments payable on September 15 and December 15, 2020 are not modified.

Trusts (other than SIFTs – Specified Investment Flow Through Trusts)

For trusts (other than SIFTs) whose income tax return filing-due date for the 2019 taxation year is March 30, 2020, the filing-due date is extended to May 1, 2020.

On May 25, 2020, Revenu Québec announced that the filing due date of trust tax returns that otherwise be due between June 1st, 2020 and August 31th, 2020, i.e. the filing due date for trusts that have a taxation year end between March 2nd,2020 and May 31, 2020, is deferred to September 1, 2020.

The deadline to pay any tax balance for 2019 that would be due no later than March 30, 2020 is deferred to September 1, 2020.

The deadline to pay instalments for the 2020 taxation year that are usually required to be paid by trusts no later than June 15, 2020 is deferred to September 1, 2020.

On May 29, 2020, the Québec government announced that the payment of tax balances and tax instalments payable by trusts for a taxation year ended during the 2020 calendar year and that would otherwise be required to be made before September 1, 2020, can be paid no later than September 1, 2020.

Corporations

On March 27, 2020, Revenu Québec announced that the filing due date of corporate tax returns that would otherwise be due between March 17, 2020 and May 31, 2020 is deferred to June 1, 2020.

On May 25, 2020, Revenu Québec announced that the filing due date of corporate tax returns that would otherwise be due between June 1st, 2020 and August 31st, 2020 is deferred to September 1, 2020.

The deadline for payment of the balance of tax payable by corporations that would otherwise be due between March 17, 2020 and August 31, 2020 is deferred to September 1, 2020.

The deadline for tax instalments by corporations that would otherwise be required to be paid between March 17, 2020 and August 31, 2020 is deferred to September 1, 2020.

Addition of a discretionary power to extend the time limit for filing applications for tax incentives intended for businesses

On May 29, 2020, the Québec government announced that the Québec tax legislation will be amended to grant the Minister of Revenue of Québec a discretionary power allowing him to agree to the filing after the expiry of the applicable deadline provided by the legislation of a prescribed form relating to a refundable tax credit or relating to the deduction of scientific and experimental development (SR&ED) expenditures. The amendments to the tax legislation will apply to a taxation year in respect of which the fiscal deadline applicable to file a prescribed form ends after March 16, 2020.

The amendments to the tax legislation will apply to a taxation year in respect of which the fiscal deadline applicable to file a prescribed form ends after March 16, 2020 and the request must be made no later than 183 days following May 29, 2020.

The Québec government specified that the Minister of Revenue of Québec will exercise this discretionary power under exceptional circumstances. The application for such an extension of the time limit must be done in writing to the Minister of Revenue, must be accompanied by the relevant prescribed form containing the prescribed information and the sectoral document duly obtained and necessary for the purposes of the tax credit, where appropriate, and must satisfy any other requirement that the Minister establishes.

The additional period cannot under any circumstance end after the last day of the one-year period that follows the end of the fiscal deadline otherwise applicable. In other words, the maximum extension is one year. Finally, the Québec Government stated that Minister’s decision is neither subject to objection nor appeal.

Trusts and partnerships that are SIFTs

On May 25, 2020, Revenu Québec announced that the filing due date of SIFT trust or partnership tax returns tax returns that otherwise be due between June 1st, 2020 and August 31th, 2020, i.e. the filing due date for trusts that have a taxation year end between March 2nd,2020 and May 31, 2020, is deferred to September 1, 2020.

The deadline for payment of the balance due by a SIFT trust or partnership that falls between March 17 and August 31, 2020 has been suspended and postponed to a date to be publicly announced by the Minister at a later time.

The deadline for payment of tax instalments by a SIFT trust or partnership that would otherwise be required to be made between March 17 and August 31, 2020 has been suspended and postponed to a date to be publicly announced by the Minister at a later time.Partnership Information Return

The measures announced on March 17 and 18, 2020 do not provide specific measures dealing with the filing of Partnership Information Returns. However, based on information available on Revenu Quebec’s website, it seems that a Partnership Information Return that is required to be filed between March 17, 2020 and March 31, 2020, could be filed by May 1, 2020.

Based on information available on Revenu Québec’s website, it seems that a Partnership Information Return that is required to be filed between April 1, 2020 and May 30, 2020 March 31, 2020, could be filed by June 1, 2020 and a Partnership Information Return that is required to be filed between May 31, 2020 and August 31, 2020, could be filed by September 1, 2020.

Québec sales tax (QST)

On March 27, 2020, the Québec government announced that the deadline to make payments in respect of the March 31, April 30 and May 30 QST remittances is postponed until June 30, 2020. The payment deadlines stipulated in the tax legislation will apply for reporting periods whose deadlines fall after June 1, 2020.

Revenu Québec announced that the filing deadlines for QST returns are unchanged. These measures are therefore harmonized with the federal announcement on March 27, 2020 regarding GST/HST. Revenu Québec further announced that no late filing penalties will be imposed on a registrant who would file its QST returns no later than June 30, 2020.

Collections and audits

Revenu Québec announced that it has suspended its audit activity, except for cases raising a risk of fraud. Revenu Québec has also suspended its collection activities. Furthermore, regarding collection measures, Revenu Québec announced that it will be open to extending payment agreements on a case-by-case basis.

Objections

On March 27, 2020, Revenu Québec announced that the 90-day deadline to file a notice of objection to a notice of assessment, which would otherwise fall between March 13, 2020 and June 29, 2020, is deferred to June 30, 2020.

With respect to the deadline to file an appeal to an assessment with the Court of Québec, pursuant to an order of the Court of Québec and the Minister of Justice, the deadline is suspended from March 15, 2020 until the expiry of the health emergency period.

The following outlines some suggestions for taxpayers intending to file notices of objection with Revenu Québec to notices of reassessment issued to such taxpayers.

If you have already received a reassessment or notice of determination to which you intend to object, consider filing your notice of objection well in advance of the due date in case there are disruptions to mail and courier services. Notices of objection must normally be filed no later than 90 days following the date of the notice of reassessment.

E-filing is not available for Québec objections but Revenu Québec administratively accepts faxed objections. On that basis, it is always preferable to file the notice of objection using two different methods (e.g., by fax and by registered mail). Should the current situation worsen, and in the event offices close, registered mail service may be restricted or unavailable and, in such case, we would recommend filing by courier.

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

If you miss the 90-day filing 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 (including, for example, disruptions to mail and courier services), as that will assist with the preparation of a request for extension. Please note that the extension request must be submitted within one year of the original deadline, and as soon as possible after the original deadline.

The information published by Revenu Québec regarding the impact of the COVID-19 pandemic can be found at the following links:

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