TEI Holds Call with Canada Department of Finance on March 30, 2020 Regarding COVID-19 Commodity Tax Issues

On March 30, 2020, members of the TEI Canadian Tax Committee had a call with the Canada Department of Finance Tax Policy Branch to discuss COVID-19 commodity tax issues and Finance’s March 27, 2020 announcement. The following is a brief summary of the discussion.

Note: The discussion with Finance were high-level discussions and focused on the general intent and parameters of the March 27, 2020, announcement.

  1. The GST/HST remittance deferral announced last March 27th for Canadian businesses applies to all GST registrants, including but not limited to large corporations, individuals, and non-resident registrants.
  2. The decision regarding whether the filing of GST/HST returns will be deferred is a decision to be made by the administrator of the tax, which is CRA. CRA will be issuing guidance on this topic imminently.
  3. The deferral of remittances must be handled on a net basis. If a registrant files and wants to claim an ITC, the ITC must be offset by GST/HST collected. Registrants cannot claim an ITC now and defer their remittance of the GST/HST collected during the period.
  4. If a registrant is in a net GST/HST receivable position (e.g., exporters), the registrant is entitled to file its return now and obtain its ITC (net of GST/HST collected/collectible).
  5. If the registrant is in a net GST/HST payable position, then the registrant can defer payment of the net GST/HST payable.
  6. Finance cannot confirm whether a taxpayer will have the ability to claim its ITCs in the reporting period where the statements of accounts are issued and defers the GST payments until June 30th. CRA/CBSA is in discussions on this issue now.
  7. Government continues to evaluate tax relief measures. Finance indicated that deferrals apply only to GST/HST and customs import duties at this time.

TEI thanked Finance for joining the call and providing guidance at this difficult time. TEI and its members are available should Finance or CRA need assistance from the business community as things progress.

Finance thanked the TEI representatives for joining the call and appreciated flexibility as these issues continue to evolve.