GST/HST deferrals during COVID-19…Use with Caution
One of the support measures the Government of Canada has introduced to help Canadian businesses with the impact of COVID-19 is a deferral of GST/HST remittances, that might otherwise have been due as early as March 31, until June 30, 2020 (more details can be found on the government website here).
During this time of uncertainty, many businesses may be tempted to rely on this deferral, but caution should be exercised when deferring GST/HST payments. Unlike income tax liabilities, unremitted GST/HST payments give rise to personal liability for directors of a corporation. We previously blogged about director liability for GST/HST here.
Many of the other initiatives proposed by the government to date (deferral of income tax, 10% wage subsidy) do not have the same personal liability consequences as the deferral of GST/HST remittances.
As a result, businesses planning to take advantage of the GST/HST deferral should ensure that the funds will be available in June to pay the outstanding amounts, otherwise the government may look to the directors to personally satisfy the amounts owing.
If you have any questions about GST/HST, please do not hesitate to contact one of our lawyers.
This blog post is intended to provide general information and does not constitute legal advice. You should consult a lawyer for advice regarding your individual situation.
Every effort has been made to ensure the contents of the blog post were accurate as of the date it was written, however, the law can change and we cannot guarantee that the information remains accurate. In addition, because the comments above are of a general nature, they may not apply for every situation. If you have questions, please contact us and we would be happy to discuss your individual circumstances, and whether there have been any changes to the law that would affect the information presented.