Taxation law

COVID-19 and deferral of sales tax reporting and payments

Apr 6th, 2020

By Louis-Frédérick Côté

On April 1st of this year, the Tax Executives Institute released a document summarizing some discussions held with the federal government. This document deals with the GST/HST.

Essentially, the federal government clarifies that GST/QST reports are to be filed on a net basis, even in the context of Covid-19. Considering the measures already announced on the deferral of GST/HST reporting and considering the harmonization measures announced by the Quebec government with respect to the QST, it appears that the situation is as follow for taxpayers who file GST/HST-QST reports on a monthly basis:

1- February, March and April 2020 reports can be filed and paid no later than June 30, 2020;

2- The May report that can under the general rules be filed on or before June 30, 2020 must still be filed on or before June 30, 2020;

3- The deferral of these filings and payments would be without penalty or interest;

4- Furthermore, it is now impossible to claim ITCs and ITRs for GST/HST and QST paid or payable for one month and to defer payment of GST/HST and QST collected or collectible as of June 30; reports must still be netted; and

5- On the other hand, a taxpayer may still file its GST/HST/QST returns according to the general rules; this may be of interest in the case of exporters or taxpayers who have other zero-rated activities (no GST/HST and QST to collect, but entitlement to ITC-ITCs for GST/HST and QST paid or payable); these taxpayers will be able to benefit from ITC-ITCs on a current basis, as in normal times.