Jan 19, 2022
As we advised in Tax Tip 20-04 , significant additional disclosure and filing requirements for trusts were announced in the 2018 Federal Budget and are scheduled to apply for trust’s 2021 and subsequent tax years.
On July 27, 2020, the Canada Revenue Agency (the “CRA”) announced a further extension to the tax payment and filing due dates for certain taxes from September 1, 2020 to September 30, 2020. The extension applies to current year individual, corporate, and trust tax returns, as well as instalment payments. Interest will not be charged on these amounts if payments are made by the extended deadline of September 30, 2020. Whether or not full payment is required in order to receive this relief is unclear.
The CRA also confirmed that they will not assess late-filing penalties as long as the return is filed by September 30, 2020. However, the CRA encourages all taxpayers to file their returns as soon as possible, especially where the returns are required to calculate other benefit entitlements such as the Canada Child Benefit.
The payment extension does not apply to HST or GST returns and balances.
The CRA will now also waive interest on “existing tax debts related to individual, corporate, and trust income tax returns from April 1, 2020, to September 30, 2020”. For goods and services tax/harmonized sales tax (GST/HST) the relief is provided from April 1, 2020, to June 30, 2020. Note that these measures do not cancel penalties and interest already assessed on a taxpayer’s account prior to this period.
This payment extension also applies to certain other tax obligations within the Income Tax Act, such as the tax in respect of overpayments to Registered Education Savings Plan. While the CRA is still not providing relief for non-resident withholding taxes, the extended deadlines, interest and penalty relief apply to non-resident returns under sections 216 and 217.
Although the CRA press release refers to waiving interest on ‘tax returns” we believe the CRA means “tax balances”. It is our interpretation that the CRA will waive interest on all existing income tax debts but only for the period April 1, 2020 to September 30, 2020 and absent further extension interest will resume accruing on October 1, 2020. This waiver period is shorter, April 1, 2020 to June 30, 2020, for GST/HST debts.
If you have any questions regarding payment and filing deadlines, a Cadesky Tax representative will be happy to assist you.
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The material provided in Tax Tip is believed to be accurate and reliable as of the date of posting. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Cadesky Tax cannot accept any liability for the tax consequences that may result from acting based on the contents hereof.