News & Insights

COVID-19 GST/HST Remittance Deferral – The Details

Tax Development Apr 01, 2020

On March 31, 2020, the Canada Revenue Agency (CRA) released a set of 11 FAQs to clarify certain elements of the GST/HST remittance deferral relief announced on March 27, 2020 (and discussed in Ryan Tax Alert | Further Federal COVID-19 Relief Measures).

Under this administrative relief, taxpayers dealing with the economic impact of the COVID-19 pandemic will have their deadlines for any GST/HST remittances extended to June 30, 2020. Specifically, the extension applies to the:

  • February, March, and April 2020 reporting periods of monthly filers;
  • Reporting period from January 1 to March 31, 2020 for quarterly filers; and
  • GST/HST return or any installments becoming due in March, April, or May of 2020 for annual filers.

As an example of how this remittance deferral works, a taxpayer normally required to file its March GST/HST return by April 30 and remit $5 million in net tax can now defer that payment until June 30, 2020.

However, while the payment of a net tax amount that becomes due on or after March 27, 2020 is deferred, taxpayers are still required to file their GST/HST returns in accordance with the usual deadlines, as the filing obligations have not been changed.  The CRA has acknowledged that it may be difficult for certain taxpayers to file their GST/HST returns on time during the COVID-19 pandemic and, in recognition of this fact, it has indicated that the late-filing penalty will be waived, provided that any outstanding returns are filed no later than June 30, 2020.

We recommend that taxpayers continue to file any GST/HST returns that become due from March 27, 2020 until June 30, 2020 by the normal deadline and avail themselves of the cashflow relief by deferring any net tax payable (i.e., the amount on line 109 of the return) until June 30, 2020.  This is particularly important for taxpayers in a refund position or those filing GST/HST rebate applications (e.g., for Public Service Bodies’ or Ontario First Nation HST Point-of-Sale rebates) with their electronic returns. The CRA has confirmed that refund amounts and certain rebate claims filed electronically will continue to be processed and paid, provided that no further scrutiny or additional taxpayer contact is required.  Unfortunately, housing and general rebate applications will not be processed until the CRA’s normal operations resume. 

Taxpayers should also be aware that this deferral only applies to GST/HST remittances.  Payments related to other excise taxes and duties (except customs duty) must be remitted by the usual due dates, but requests to waive any interest on outstanding amounts will be considered on an individual basis.

More Information

Further information on the GST/HST remittance deferral measure announced by the CRA is available on the government’s website at:
https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-gst-hst.html#toc0

For a summary of all significant relief initiatives announced by North American tax authorities, including the latest information on filing and payment deadline extensions by jurisdiction, please visit the Ryan COVID-19 Tax Information Hub.

If you have any questions about how these changes might impact your organization, please do not hesitate to contact the Ryan TaxDirect® line at info@ryanco.ca or 1.800.667.1600.