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COVID-19 and Tax Update

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COVID-19 and Tax Update

We hope that you are keeping safe and doing well during these trying times.  Some will fight over toilet paper, and others will risk their own lives to support the community at large in these challenging times we are currently living in.  Whether you are on the front lines in the hospitals, working from home with restless children or just dealing with your own thoughts in self-isolation, everyone is in this together and dealing with their own respective problems.

We are writing to let you know that we are here for you.  While we are taking every reasonable precaution to help ensure the health and safety of our staff and our clients, we are very much still fully operational.  We are working hard to ensure that our clients are being serviced and that their tax and accounting obligations are being met in a timely manner.

Until the spread of COVID-19 is substantially curtailed, we will conduct ALL future meetings by phone and/or video conferencing. Thankfully our firm is set up to operate remotely and even in times like these, our secure cloud-based technology allows us to keep our social distance and still provide outstanding service to you.  Whether it be bookkeeping services, personal tax, corporate taxes or payroll, our services will remain uninterrupted during this difficult time. Never before have we been so proud to be on the cloud! If your family or colleagues are looking for help with their taxes with a virtual firm, please feel free to refer them our way and we can definitely schedule some time to see how we can be of assistance to them as well.

TAX FILING DEADLINE EXTENSIONS

  • For individuals, the return filing due date will be deferred until June 1, 2020.  However, the CRA encourages individuals who expect to receive benefits under the Goods and Services Tax credit (GSTC), or the Canada Child Benefit not to delay filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.
  • For trusts having a taxation year ending on Dec. 31, 2019, the return filing due date will be deferred until May 1, 2020.
  • Although there was speculation yesterday about extending the corporate filing deadline, no formal pronouncements were made by the Government in respect of partnership or corporate filing deadlines.

TAX PAYMENT DEADLINE EXTENSIONS

For both individuals and businesses, the CRA will allow all taxpayers to defer until after Aug. 31, 2020, the payment of any income tax amounts that become owing on, or after today, and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act.  No interest or penalties will accumulate on these amounts during this period.

FEDERAL GOVERNMENT UPDATES

The Government released an $82 billion package in financial support – $27 billion in direct relief to workers and business, and $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals. Key tax measures are summarized below.

Additional details on the Government of Canada’s COVID-19 economic plan such as employment insurance measures, subsidies, grants, and miscellaneous benefits can be found in the official release.

The government has also created a number of useful resources that can provide guidance and support options in times like this.  Here are a few resources that may prove to be useful to you:

1. Supporting your employees

People are the cornerstone of any successful business. It is important for you to protect your employees – open, two-way communication is essential to achieving this goal.

No employer should feel like they have to lay off a worker because of the virus, and no one should have to worry about their job if they have to be quarantined. That’s why the Government of Canada’s $1 billion COVID-19 Response Fund goes towards support for employers and workers through the Work-Sharing program, and by waiving the one-week waiting period for Employment Insurance sickness benefits.

2. Financial implications and business preparedness

Canada’s strong fiscal position means we are well-positioned to respond to challenges – and our approach includes measures to prepare for the possible broader impacts on our people, the economy, and small businesses across the country.

It is also vital for Canadian businesses to have contingency plans in place to manage potential financial risk. The Canadian Chamber of Commerce, as well as Business Development Canada, has developed helpful and comprehensive guides to help you with planning and preparedness.

3. Business travel and events

Companies should consider the impacts of international travel on their operations. Canada has several active travel health notices for COVID-19 for countries around the world. These are updated regularly based on ongoing risk assessments.

When it comes to conferences and business events, you can consult the Government of Canada’s advice on deciding whether to postpone or cancel a mass gathering of people.

On March 13, 2020, the Government of Canada advised Canadians to avoid non-essential travel outside of Canada until further notice.

4. Exporting and doing business in international markets

Today’s business climate means many companies are globally connected – what is happening around the world has a direct impact on operations in Canada.

The Trade Commissioner Service has an unmatched network of over 1,000 business-savvy experts in 160 cities worldwide who help Canadian businesses trade, grow, and succeed. Trade commissioners can provide you with market-specific insights and guidance to help you mitigate the impacts of COVID-19.

 

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