Infosys faces a fine of over Rs 82 lakh in Canada. According to a report by news agency PTI, the Justin Trudeau-led government has imposed a fine of over C$1.34 lakh on the Indian IT company. The Canadian government claimed that the penalty against Infosys was imposed due to underpayment of health tax to employees for the fiscal year ended December 31, 2020.
What the Canadian government said
According to the report, Bengaluru-based Infosys received an order from the Canadian Finance Ministry last week. In this order, it was mentioned that a penalty of CAD 1,34,822.38 was imposed on the company.
“Penalty imposed for alleged underpayment of employee health care taxes for the year ended December 31, 2020,” the company said in its regulatory filing.
What Infosys said about the penalty
In response to the Canadian penalty, Infosys said the penalty will not have a material impact on the company’s finances, operations or other activities.
Infosys has a strong presence in Canada with multiple offices across the country. These include Alberta, Mississauga in Ontario, Burnaby in British Columbia and another in Ontario (Ottawa).
What is the Canada Employee Health Tax (EHT)?
The Employee Health Tax (EHT) is a mandatory payroll tax imposed on employers in select Canadian provinces such as Ontario and British Columbia. This tax is calculated based on various forms of employee compensation, including salaries, bonuses, taxable benefits and stock options. Its main goal is to help finance health services in the province.
For example, in Ontario, employers must pay EHT on the compensation of employees who:
What the Canadian government said
According to the report, Bengaluru-based Infosys received an order from the Canadian Finance Ministry last week. In this order, it was mentioned that a penalty of CAD 1,34,822.38 was imposed on the company.
“Penalty imposed for alleged underpayment of employee health care taxes for the year ended December 31, 2020,” the company said in its regulatory filing.
What Infosys said about the penalty
In response to the Canadian penalty, Infosys said the penalty will not have a material impact on the company’s finances, operations or other activities.
Infosys has a strong presence in Canada with multiple offices across the country. These include Alberta, Mississauga in Ontario, Burnaby in British Columbia and another in Ontario (Ottawa).
What is the Canada Employee Health Tax (EHT)?
The Employee Health Tax (EHT) is a mandatory payroll tax imposed on employers in select Canadian provinces such as Ontario and British Columbia. This tax is calculated based on various forms of employee compensation, including salaries, bonuses, taxable benefits and stock options. Its main goal is to help finance health services in the province.
For example, in Ontario, employers must pay EHT on the compensation of employees who:
- Physical work at the employer’s premises in Ontario.
- Are associated with the employer’s permanent establishment in Ontario.
- Do not physically work at one of the employer’s premises but receive payment from or through an Ontario premises.
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