Tax Measures Under Canada’s COVID-19 Economic Response Plan

Flexibility for Businesses in Respect of Paying and Filing Taxes

The Response Plan contains measures that will allow businesses to defer until September 1, 2020, the payment of any income tax that becomes owing between March 18, 2020, and August 31, 2020. Interest and penalties will not be applicable to these unpaid tax balances during this period. This measure will apply to both monthly instalments and year-end tax balances due under Part I of the Income Tax Act (Canada) (the “ITA”).

Generally, corporations (other than certain CCPCs) must pay income taxes owing under Parts I, VI, VI.1, and XIII.1 of the ITA on a monthly basis by the last day of each month. A corporation must also pay the remainder of any Part I taxes within 2 months (or in the case of certain CCPCs, 3 months) after its fiscal year-end. Under this measure, both of these payment deadlines are deferred until September 1, 2020, but only in respect of taxes levied under Part I of the ITA.

The deadlines to file certain categories of tax and information returns have been extended:

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