An update regarding request for relief in times of pandemic

Written by Mélanie Nguyen

Did you know that, under certain circumstances, tax authorities can waive interest and penalties that have accumulated on your tax debt?

Thus, despite what is written on your notice of assessment, it is important to mention that for any debt already in your tax file, interest continues to accumulate at the prescribed rate.

Circumstances giving rise to relief from penalty and interest, but are not limited to, are the following:

  • an inability to pay by the taxpayer
  • an action imputable to the tax authorities
  • an extraordinary situation beyond the taxpayer’s control (illness, accident, death, natural disaster)

While the COVID-19 pandemic has been particularly financially challenging for many taxpayers, the Canada Revenue Agency recently confirmed that it has waived interest on tax debts related to individual, corporation, and trust income tax returns for the period April 1, 2020 to September 30, 2020, and April 1, 2020 to June 30, 2020 for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) without any request from taxpayers. However, as for the Quebec Revenue Agency, such a request must be made expressly for the cancellation of interest charged to a tax file.

If you think that you may not be able to pay your tax debt or comply with a payment agreement, due to COVID-19, or any other special circumstances, you may ask the tax authorities to cancel the penalties and interest accumulated in your file for periods outside the above-mentioned periods.

To submit a Request for Interest and Penalty Relief, we invite you to contact your legal advisor.