Update for Individuals and Businesses.
Plus ça change, plus c’est la même chose.
The Federal government has introduced some relief provisions for individuals and businesses as outlined in our March 18, 2020 Developments memorandum, but the following tax filings remain unchanged:
- Source deductions
You should make sure that these filings and payments are made on time in order to avoid any interest and penalties.
The filing deadline for the self-employed and their spouse or common-law partner has not been extended beyond the normal June 15 deadline. However, the deadline to pay any balance due has been extended from April 30 to August 31, 2020.
Application of corporate tax relief provisions
We believe that any tax liabilities that arose prior to March 18, 2020, will not be subject to the relief provisions. As a result, any corporation with a fiscal year-end on or before December 31, 2019, that is required to pay the balance of taxes within two months of their year-end, will still be obliged to pay their taxes and may not automatically receive the interest and penalties relief provisions.
Canadian Controlled Private Corporations (CCPC) are required to make their tax payments within three months of their year-ends. As a result, any CCPCs with a year-end after November 30, 2019, will be able to take advantage of tax relief provisions.
Records of Employment (ROE)
Any companies that have had to lay-off employees have to remember to provide) to their employees, and submit the ROEs to Service Canada as follows:
- within five calendar days of the first day of an interruption of earnings if you issue ROEs on paper; or
- within five calendar days after the end of the pay period in which an employee’s interruption of earnings occurs if you submit the ROE electronically through Record of Employment on the Web (ROE Web).
You can find guidance on how to register for ROE Web is provided on the Government of Canada website at the following address: https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/ei-roe/register-roe.html
Changes to the Ontario Employment Standards Act (ESA)
The Ontario government has made changes to the ESA which is designed to ensure that, regardless of the reason for the employee having to miss work due to the current COVID-19 pandemic, the employee will be entitled to a job-protected leave of absence.
- The ESA provides work protection under the following circumstances:
- The employee is under medical investigation, supervision or treatment for COVID-19
- The employee is acting in accordance with an order under the Health Protection and Promotion Act
- The employee is in isolation or quarantine
- The employee is acting in accordance with public health information or direction
- The employer directs the employee not to work, or
- The employee needs to provide care to a person for a reason related to COVID-19 such as a school or daycare closure
The employee is needed to provide care or assistance to family members, which includes persons who consider the employee to be like a family member.
Employers may require employees who take a leave to provide evidence that is reasonable in the circumstances, at a time that is reasonable in the circumstances in support of a leave of absence. However, an employer cannot require an employee to provide a physician’s medical certificate as evidence.
The length of the leave of absence arising out of an emergency leave can last for the duration of the period that the employee is not performing their employment duties for any of the reasons that are set out in the statute.
Does your insurance policy cover you for pandemics?
Check your insurance policies as you may find that you have insurance against pandemics, in particular, or business interruptions.
Generally speaking, there is little harm in presenting a claim to your insurer, especially considering the magnitude of anticipated losses resulting from COVID-19. In presenting a claim, businesses are required to establish their financial losses and the root causes. As such, it is critical that businesses work with their internal and external financial teams at documenting all losses, and any efforts at mitigation.
U.S. filing deadlines extended to July 15, 2020
The Internal Revenue Service (IRS) has announced that the deadline for filing a US federal income tax return, filing an extension and making federal income tax payments from April 15, 2020, to July 15, 2020.