COVID 19 – Economic Response Plan for Businesses

On March 18, 2020, the Government of Canada introduced a number of measures, including tax relief measures, intended to assist with financial hardships related to the COVID-19 outbreak. The tax related measures are summarized below.

2019 Tax Return Payment Due Dates

All businesses will be permitted to defer, until September 1, 2020, the payment of any income tax amounts that become owing after March 17, 2020 and before September 2020. This measure will apply to instalment and final tax balances due under Part I of the ITA (the measures will not apply to GST/HST remittances due). No interest or penalties will accumulate on these amounts during the relief period. Unlike for individuals, the corporate tax return filing deadline has not been extended.

Financial Support for Businesses – CEWS

The Government is proposing to provide “eligible small employers” a temporary wage subsidy for a period of three months equal to 10% (increased to 75% as announced on March 27, 2020) of remuneration paid during that period. The maximum subsidy will be $1,375 (increased to $3,388 as announced on March 27, 2020) per employee per month. According to the News Release, “businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration” (additional details of how this subsidy will operate will presumably be released shortly. The subsidy will be available to corporations eligible for the small business deduction and to registered charities and NPOs.

This wages subsidy (CEWS) program has been extended to August 29, 2020 announced by Finance Minister Bill Morneau on May 15, 2020.      

Click here to know more about: How to receive it?

Freeze of CRA Audit Activity

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 (i.e. starting March 18, 2020). “For the vast majority of businesses”, the CRA will temporarily suspend audit interaction with taxpayers and representatives (it is unclear whether the CRA will request a waiver be signed if the statute-barred period will otherwise expire during the audit freeze period).

Resources for Canadian Businesses:

https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html

https://www.canada.ca/en/services/business/maintaingrowimprovebusiness/resources-for-canadian-businesses.html#_2._Support_for_1

https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email leo@awkcpa.com or alfred@awkcpa.com for further advice.