Corona Pandemic: Immediate Taxation, Legal Measures and Financial Aid in Canada, Turkey and Tunisia
Canada has released various measures since the Coronavirus outbreak to ease the impact on society. Turkey and Tunisia have announced new law decrees as the situation continues to worsen during the crisis. Our professionals summarise for you.
On 18 March 2020, the federal government announced a number of measures that were aimed at providing relief and support to Canadians during the COVID-19 crisis. From the point of view of tax compliance, there were extensions of the filing due dates for 2019 personal income tax returns and trust income tax returns with a tax year ending 31 December 2019.
- Personal income tax returns that were originally due on 30 April 2020, are now due to be filed by 1 June 2020 and
- Trusts with a taxation year ending 31 December 2019, which were originally due on 30 March 2020, are now due to be filed by 1 May 2020.
In addition, all taxpayers can defer the payment of income tax amounts that become due on or after 18 March 2020 until after 31 August 2020, without incurring interest or penalties during this period. The relief from penalties and interest includes income tax balances and income tax instalments.
Extension of Filing and Remittance Deadlines
While the extension of the personal tax/trust filing deadlines and the deferral of income tax payments provide taxpayers with much-needed relief, the federal government also released the following measures concerning filing deadlines for partnership information returns (T5013), corporate income tax returns (T2) and goods and service tax/harmonised sales tax (GST/HST) returns.
- The filing of returns, forms, designations and information requests due after 18 March are deferred to 1 June 2020.
- Trust, partnership and non-resident (NR4) returns will be due on 1 May 2020.
- The following GST/HST and customs duties payments are deferred to 30 June 2020:
- Amounts monthly filers are to remit for February, March and April 2020.
- Amounts quarterly filers are to remit for 1 January to 31 March 2020.
- Annual filers whose returns are due March, April or May 2020 – amounts due on filing and instalments.
- Statements for customs duties and GST on imports for March, April and May 2020.
Extensions of Tax Appeals/Objections/Collections
- Objections due after 18 March will have until 30 June 2020 to file.
- Objections related to taxpayers’ entitlement to credits or benefits (including Employment Insurance (EI) benefits) will continue to be processed.
- All filed objections related to other tax matters are currently in abeyance until further notice and no collection action will be taken.
- No new audits will commence and there will be no requests for information on existing audits.
- No audits should be finalised and no reassessments should be issued.
- Banks and employers are not required to comply or remit on Requirement to Pay actions by the Canada Revenue Agency (CRA).
- Ontario has announced a suspension of audit activities for April 2020.
Canada Emergency Business Account
The government will guarantee up to CAD 40,000 of loans to small businesses and non-profit organisations, which will be implemented by eligible financial institutions. Key information relating to this new loan arrangement includes:
- The loan will be interest-free.
- To be eligible, the organisation must have between CAD (Canadian Dollar) 50,000 to CAD 1 million of payroll in 2019.
- Repayment of the loan by 31 December 2022 will result in a waiver of 25% (up to CAD 10,000)
Employer Health Tax Exemption Increased
The Ontario government announced on 25 March 2020 that the Employer Health Tax (EHT) exemption will be increased from CAD 490,000 to CAD 1 million for the 2020 tax year. The eligibility criteria for the exemption and applicable tax rate remains the same. The exemption will revert to CAD 490,000 on 1 January 2021.
Ecovis Canada has prepared various communications to address how we are operating to assist clients under these difficult conditions. We are dedicated to navigating all clients through the crisis with prompt support and advice.
On 17 April 2020, the Turkish government published Law No. 7244, on the “Mitigation of the Impacts of the Novel Coronavirus (COVID-19) Outbreak on Economic and Social Life and on the Amendment of Certain Laws”. The important changes include:
- Private equity companies will be able to distribute only 25% of 2019 net profit until 31 September 2020. Profits of the previous fiscal year and distributable reserves will not be distributed within this period. If the 2019 profit distribution decision has been taken but the payment has not been made, payments pertaining to more than 25% of the profit will be postponed.
- Employment contracts cannot be terminated for three months starting from 17 April 2020.
- Cash support will be provided to those employees who are entitled to unpaid leave from their employers and who cannot benefit from the short time working allowance. Those whose employment contracts were terminated after 15 March 2020 and cannot receive unemployment benefits will also receive the cash support.
- Short-term employment (short time working) allowances will be made by the government without waiting for the completion of the official conformity inspection. In the event that an employer provides incorrect information and documentation, overpayment and improper payments will be collected from the employer along with statutory interest.
- Those requiring conformity inspection control of short-term employment allowance applications are excluded from the obligation to be finalised within 60 days.
- Agricultural warehouse licenses valid in 2020 are extended for a year.
- Inspections of merchant ships are postponed until 1 August 2020.
- Payment of debts to the Turkish Electricity Distribution Corporation (TEDAS) may be postponed until the end of October 2021.
- The annual advertisement and advertising taxes and environmental cleaning taxes of those companies whose activities are stopped or cannot be carried out shall not be paid for the duration of any such stoppage.
Ecovis Turkey remains at its clients’ disposal to provide help with any urgent requests and where needed. We are here to provide our best support in guiding our clients through this difficult time.
On 15 April 2020, the Tunisian government released a new law decree including special measures relating to COVID-19.
- The suspension of article 14, section 3 of the labour code. Companies can no longer dismiss employees by invoking the case of force majeure. However, this decision does not imply an obligation for the employer to pay for days not worked. This remains the subject of internal negotiation in the company.
- The possibility for companies to deduct paid days off from employees’ paid holidays and even to consume the paid holidays for 2020 in advance.
- The possibility for companies to recover the days not worked as overtime within 6 months after the end of confinement.
- The possibility of obtaining aid amounting to TND (Tunisian dinar) 200 per employee under certain conditions (provision of the remaining salary by the employer, good standing with the CNSS, Caisse Nationale de Sécurité Sociale de Tunisie). The procedure is online here: https://helpentreprise.social.tn/
- An exceptional contribution of 1 working day for the benefit of the state budget will be deducted from all April salaries. This contribution will be subject to withholding tax which will be paid with the April monthly declaration, to be paid on 28 May 2020.
Ecovis Tunisia is monitoring this situation and we will be reporting any measures that emerge with an impact on companies in general.