Time Limits and Other Periods Act (COVID-19)

Like many individuals and organizations, the CRA has been impacted by the COVID-19 pandemic. For the past several months, the CRA has focused on delivering critical services, including benefits, to Canadians and businesses facing hardship as a result of the global COVID-19 outbreak. Additionally, taxpayers needed extra time to respond to CRA compliance questions. As a result, the CRA may need additional time to finalize compliance activities, including reviews and audits.

The extension to the statute-barred date applies where a taxpayer's income tax return would have otherwise become statute-barred from assessment, reassessment or additional assessment on or after May 20, 2020 and before December 31, 2020.

The extension applies where a GST/HST reporting period would otherwise become statute-barred from assessment, reassessment or additional assessment on a day that is on or after May 20, 2020 and before December 31, 2020.

Similar to the coming into force of many tax provisions, the temporary authority under the TLOPA takes into consideration the date on which the draft legislation was announced, which was May 19, 2020. Therefore, reporting periods and taxation years which became statute-barred on or before May 19, 2020 are not covered under the Ministerial Orders.

The legislation allows for the extension of these deadlines for a maximum of six months but not beyond December 31, 2020. For example, a tax return that would normally become statute-barred on September 30, 2020 will not become statute-barred until December 31, 2020. In contrast, a return that would otherwise have been statute-barred on May 31, 2020, will become statute-barred on November 30, 2020.

Generally, taxpayers would be informed of the details of a potential (re)assessment, including whether or not the CRA is applying an extension to a (re)assessment period under the Ministerial Order, by the auditor. Any questions about the timing or reasons for a (re)assessment should be addressed with the CRA auditor/employee or their direct supervisor.

A request to CRA for an extension of time can generally be made up to one year after the deadline to file the objection. Under the TLOPA, taxpayers and registrants whose deadline to request an extension of time to file a Notice of Objection to a (re)assessment expired between March 13, 2020 and December 30, 2020 will have up to six additional months, but not beyond December 31, 2020, to make their request. For example, a taxpayer or registrant whose deadline to make a request for an extension of time to object to a (re)assessment was March 13, 2020 will now have until September 13, 2020 to make their request. Similarly, a taxpayer or registrant with a September 30, 2020 deadline will have until December 31, 2020 to make their request.

Taxpayers and registrants whose deadline to request an extension of time to file a Notice of Objection to an assessment or reassessment expires after December 30, 2020 will not receive an extension of time to make their request.

Taxpayers and registrants whose deadline to apply to the Tax Court of Canada for an extension of time to object to a (re)assessment expired between March 13, 2020 and December 30, 2020 will have up to six additional months, but not beyond December 31, 2020, to make their request. For example, a taxpayer or registrant whose deadline to make a request for an extension of time to object to a (re)assessment was March 13, 2020 will have until September 13, 2020 to make their request. Similarly, a taxpayer or registrant with a September 30, 2020 deadline will have until December 31, 2020 to make their request.

Taxpayers and registrants whose deadline to request an extension of time to file a Notice of Objection to an assessment or reassessment expires after December 30, 2020 will not receive an extension of time to make their request.

No, the legislation does not apply to Canada’s tax treaties and does not allow for the extension of any time limit to raise an adjustment that may be contained in Canada’s tax treaties. For the same reason, the legislation also does not allow for the extension of any time limit that may apply for notifying a treaty partner of the (potential) double tax arising from an adjustment. Similarly, the legislation does not extend the period during which a request for competent authority assistance can be made under the Mutual Agreement Procedure of Canada’s treaties.