In order to mitigate the economic impact of the COVID-19 pandemic, Québec's Minister of Finance recently published Information Bulletins 2020-3 and 2020-4 and a press releasein order to put in place emergency tax measures aimed at stabilizing our economy and reducing the burden on Québec citizens and businesses. This bulletin will provide a summary of the key tax measures that were included with the announcement.
Please note that these measures apply only to Québec. Fasken's comments on the measures announced by the federal government are also available on our Web site.
Revenu Québec has stated that no taxpayers will be penalized as a result of the situation caused by COVID-19. Moreover, tax audits and collection activities are suspended and Revenu Québec will be open and flexible with respect to payment arrangements related to outstanding tax debts.
The City of Montréal has decided to postpone the deadline for the second payment of municipal taxes from June 1 to July 2, 2020. This measure applies to both individuals and businesses.
The pandemic could have a significant negative impact on taxpayers' liquidity. In order to provide immediate support to certain taxpayers, a deferral of the payment of certain instalments and the balance of taxes owing for a taxation year will be granted to them, without interest or penalty, under the terms and conditions set out below:
• For individuals, the due date for filing their income tax return will be extended to June 1, 2020. In addition, the balance of personal income tax that would be due on or after April 30, 2020 will now be due on September 1, 2020.
• In addition, for an individual who carries on or whose spouse carries on a business, the due date for filing a tax return for the 2019 taxation year remains June 15, 2020. However, for such individuals, the balance of tax payable for the 2019 taxation year will be due on September 1, 2020.
• An individual who has an amount to pay for contributions, to the Québec Pension Plan (QPP), the Québec Parental Insurance Plan (QPIP), the Health Services Fund (HSF) and the Québec Prescription Drug Insurance Plan (QPIP), for the 2019 taxation year, has until September 1, 2020 to pay this amount.
• Individuals, who have instalment payments due for June 15, 2020, will be able to defer the payment until September 1, 2020.
• Holders of a Registered Retirement Income Fund (RRIF) who are required to make minimum mandatory withdrawals due to their age would now be able to reduce the minimum withdrawals by 25%.
• For trusts (other than SIFT trusts) with a December 31 taxation year-end, the tax return filing date will be extended to May 1, 2020. In addition, the balance of tax due from that trust that would be payable on or after March 17, 2020 can be deferred until September 1, 2020.
• Instalment payments that were due by June 15, 2020 can be deferred until September 1, 2020.
• There will be no change to the rules applicable to the filing due date for corporate income tax returns.
• A corporation that is required to pay taxes, for the period between March 17, 2020 and August 31, 2020, will have until September 1, 2020 to pay its taxes.
• Instalment payments due for the period of March 17, 2020 to August 31, 2020 can be deferred until September 1, 2020.
Specified Investment Flow-Through (SIFT)
• A SIFT trust or partnership that would be obligated to pay an amount as an instalment and/or as tax payable which falls within the period of March 17, 2020 and ends on August, 31 2020, can pay the remainder of its instalment and/or tax payable until September 1, 2020.
It is important to note that no relief has been announced, for both the employee and employer’s portion, regarding obligations to collect and remit source deductions.
In addition no relief has been announced with respect to your obligations to collect and remit the Goods and Services Tax (GST) and the Québec Sales Tax (QST).
Stay tuned for our follow up press release regarding other proposed measures.