Businesses affected by tariffs have more time to pay income tax and remit GST/HST during the next three months — as previously announced — and the Canada Revenue Agency (CRA) has now provided further details about the tax deferral.
On March 21, the federal government said it was deferring corporate income tax payments and GST/HST remittances from April 2 to June 30 to support businesses affected by tariffs. The government estimates the deferral will provide up to $40 billion in liquidity to businesses.
In a blog post about the deferral, Rosenswig McRae Rosso LLP said “If your business is experiencing short-term financial pressure, this deferral could help manage liquidity and prioritize operational needs in the months ahead.”
On Friday, the CRA updated its website with further details, saying it will waive interest on GST/HST and T2 instalment and arrears payments that are required to be paid between April 2 and June 30. The CRA will also provide interest relief on existing GST/HST and T2 balances between those dates.
Rosenswig McRae Rosso stressed in its blog post that the relief is valid only if payments are made by June 30: “If you miss that deadline, the CRA will begin applying interest and a 7–8% penalty for the three-month period retroactively — from the original due date, not from July 1.”
The government has announced several business-focused measures to address the trade war, as well as changes to employment insurance, such as temporarily waiving the one-week waiting period.
In a blog post outlining the relief measures, Armando Iannuzzi, co-managing partner with KRP LLP, said no matter which political party wins the election on April 28, “what is virtually certain is that the federal government … will continue to roll out policies that attempt to mitigate the bottom-line threats faced by affected SMEs [small and medium-sized enterprises].”
