CO COVID 1 19: 8 8 Key GST/ T/HST ST Issues es Ro Rosem emary An y Anderson son Terry B y Barnet nett Noa oah Sa Sarna na Presentation not intended to convey legal advice. Current as of June 3, 2020.
Ag Agend nda 1. 1. Strateg egic c consi sider erat ations s of defer erring g filing, p paymen ent o or both 2. 2. Back k in Busi siness: ess: Up Updat ate o e on CRA RA O Oper erat ations s 3. 3. Changes ges to Time L e Limits s – when en i is i s it st stat atute bar barred? 4. 4. Appeal eal D Deadlines es – 90 day 90 days f from w when en? 5. 5. Pros os a and nd Cons Cons of of us using B Bad D Debt r rul ules 6. 6. Deferring Com Commercia ial R l Rent nt – is t s the t e tax ax st still du due? e? 7. 7. GST/ ST/HST Tr T Trap – Conv Converting AirBn BnBs Bs to o Lon ong-Ter erm Re Rental als 8. 8. Impl plic ications of of sellin ling onl online – what at t tax ax ap applies? As of June 3, 2020
GST/HST Pa ST Paym yment ent D Deadl dline As of June 3, 2020
Ta Tax Filing a ng and nd R Repor orting ng GST Filing: • Reporting Deadlines were not changed; BUT • CRA has agreed not to impose penalties if filed by June 30 th GST Payment • All payments due on or after March 8 th , now due June 30 th As of June 3, 2020
Impl plicat cations • More time to calculate adjustments to reduce liability • Short term Interest Free loan BUT • Returns don’t go statute barred until they are filed As of June 3, 2020
But ut don’ on’t b be late! e! • Filing Penalties - failure to file triggers • Interest at prime plus 4% compounding daily • Can’t pay? Director’s liability? As of June 3, 2020
Dir irector’s ’s L Lia iabili lity? • CRA’s audit policy (pre-COVID 19) • Directors are assessed automatically with limited exceptions • ETA distinguishes between types of organizations • Corporations • Unincorporated Entities (for example, Registered Charities, Not for Profit’s) As of June 3, 2020
Ag Agend nda 1. 1. Strateg egic c consi sider erat ations s of defer erring g filing, p paymen ent o or both 2. 2. Back k in Busi siness: ess: Up Updat ate o e on CRA RA O Oper erat ations s 3. 3. Changes ges to Time L e Limits s – when en i is i s it st stat atute bar barred? 4. 4. Appeal eal D Deadlines es – 90 day 90 days f from w when en? 5. 5. Pros os a and nd Cons Cons of of us using B Bad D Debt r rul ules 6. 6. Deferring Com Commercia ial R l Rent nt – is t s the t e tax ax st still du due? e? 7. 7. GST/ ST/HST Tr T Trap – Conv Converting AirBn BnBs Bs to o Lon ong-Ter erm Re Rental als 8. 8. Impl plic ications of of sellin ling onl online – what at t tax ax ap applies? As of June 3, 2020
CRA RA Operations ons CRA’s COVID-19 BUSINESS CONTINUITY PLAN • Increasing Operations – mostly online but with E-mail privileges!! • Expected return: June 26 th – at the earliest As of June 3, 2020
CR CRA: Ba Back i in Bu Business • Registrations: regular and non-resident registrations operational • Authorizations: only if filed electronically • Refunds: highest priority • Collections: focus on hardship cases/ insolvency/ high risk As of June 3, 2020
CR CRA: Ba Back i in Bu Business • Returns: expect delays in processing paper: returns/elections • Credit returns - electronic filing is MUCH faster • Rulings: just starting back to work/ rulings sent to TSO’s handled more quickly • Ruling requests should be submitted through the portals As of June 3, 2020
CR CRA: Ba Back i in Bu Business • Audits: • Auditors have limited ability to work remotely • Taxpayer privacy a key concern • CRA was granted special email privileges • Some can call taxpayers/advisors but can’t leave messages so prefer email; • Documents typically need to be submitted through the portal • Generally looking at finishing audits that have started • Timing is based on risk / suspected criminal activity has highest priority • New audit activity primarily involves credit returns As of June 3, 2020
Ag Agend nda 1. 1. Strateg egic c consi sider erat ations s of defer erring g filing, p paymen ent o or both 2. 2. Back k in Busi siness: ess: Up Updat ate o e on CRA RA O Oper erat ations s 3. 3. Changes ges to Time L e Limits s – when en i is i s it st stat atute bar barred? 4. 4. Appeal eal D Deadlines es – 90 day 90 days f from w when en? 5. 5. Pros os a and nd Cons Cons of of us using B Bad D Debt r rul ules 6. 6. Deferring Com Commercia ial R l Rent nt – is t s the t e tax ax st still du due? e? 7. 7. GST/ ST/HST Tr T Trap – Conv Converting AirBn BnBs Bs to o Lon ong-Ter erm Re Rental als 8. 8. Impl plic ications of of sellin ling onl online – what at t tax ax ap applies? As of June 3, 2020
Cha hanges ges to o Limitation on Pe Periods ds • So you thought the GST/HST return went statute barred during CRA shutdown?? • Normal reassessment period: • 4 years from the later of the due date of the return and the date it is actually filed • e.g. BuilderCo – self-supplied apartment block in Feb 2016 • GST/HST return for Feb. 2016 was statute-barred March 31, 2020? …… not so fast As of June 3, 2020
Time e Li Limits a s and O d Other er P Per eriods Ac Act (C (COVID-19) 9) • Proposed legislation will give MNR NR discretion to suspend or extend assessment limitation periods • Suspension/extension can be for up to 6 months • Order can be retroactive to March 13, 2020 • Instead of March 31, 2020, Feb 2016 GST/HST return may not be statute-barred until Sept 30, 2020?? As of June 3, 2020
Time e Li Limits a s and O d Other er P Per eriods Ac Act ( (CO COVID-19) 9) • Unclear whether extension will apply only to limitation dates falling in the “Covid” period • i.e. these deadlines are extended OR • Over the next four years – add on to every GST/HST limitation calculation the days that were part of the “Covid” period in 2020 As of June 3, 2020
Ag Agend nda 1. 1. Strateg egic c consi sider erat ations s of defer erring g filing, p paymen ent o or both 2. 2. Back k in Busi siness: ess: Up Updat ate o e on CRA RA O Oper erat ations s 3. 3. Changes ges to Time L e Limits s – when en i is i s it st stat atute bar barred? 4. 4. Appeal eal D Deadlines es – 90 day 90 days f from w when en? 5. 5. Pros os a and nd Cons Cons of of us using B Bad D Debt r rul ules 6. 6. Deferring Com Commercia ial R l Rent nt – is t s the t e tax ax st still du due? e? 7. 7. GST/ ST/HST Tr T Trap – Conv Converting AirBn BnBs Bs to o Lon ong-Ter erm Re Rental als 8. 8. Impl plic ications of of sellin ling onl online – what at t tax ax ap applies? As of June 3, 2020
CRA Appe ppeal al Dead eadlines es • Did 90-day GST/HST objection deadline fall after March 18, 2020 when CRA closed down? • For all objections due between March 18 and June 2020, the CRA wi will trea eat t t the d dea eadline a ne as J June 3 ne 30, 2 2020. • CRA will automatically allow the late filing of objections • But you still can file objections today: online or by fax to the CRA As of June 3, 2020
Ta Tax Cour ourt Appea eal Deadl dlines • PROPOSED ED: Tim ime L Lim imit its an and O Other P Perio iods A Act ( (Co Covid 19) 19) • Law will suspend the counting of time in the 90 day period for appealing to Tax Court • March 13, 2020 through Sept 13, to be excluded • e.g. CRA confirms assessment February 1, 2020 • appeal to Tax Court normally due May 1, 2020 (90 th day) • Extends appeal deadline by 185 days – e.g. to Nov 2, 2020 • Government can shorten the suspension period As of June 3, 2020
Othe her D Deadl dlines nes? • Currently, no suspensions/extensions proposed for : • 2/4 year deadline for ITC claims • 2/4 year limit for rebate claims (i.e. 2 years limit for tax paid in error) • Directors liability safety period • i.e. if director resigns, CRA has two years to assess for under-remitted net tax • This deadline is not suspended As of June 3, 2020
Ag Agend nda 1. 1. Strateg egic c consi sider erat ations s of defer erring g filing, p paymen ent o or both 2. 2. Back k in Busi siness: ess: Up Updat ate o e on CRA RA O Oper erat ations s 3. 3. Changes ges to Time L e Limits s – when en i is i s it st stat atute bar barred? 4. 4. Appeal eal D Deadlines es – 90 day 90 days f from w when en? 5. 5. Pros os a and nd Cons Cons of of us using B Bad D Debt r rul ules 6. 6. Deferring Com Commercia ial R l Rent nt – is t s the t e tax ax st still du due? e? 7. 7. GST/ ST/HST Tr T Trap – Conv Converting AirBn BnBs Bs to o Lon ong-Ter erm Re Rental als 8. 8. Impl plic ications of of sellin ling onl online – what at t tax ax ap applies? As of June 3, 2020
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