Canada's Justin Trudeau government imposes fine of Rs 82 lakh on Infosys; here's why

With a substantial presence in Canada, Infosys operates from multiple office locations across the country, including Alberta, Mississauga in Ontario, Burnaby in British Columbia, and Ottawa in Ontario.

Justin Trudeau-led Canada government has imposed a penalty of over Rs 82 lakh on Infosys, an Indian IT company. It is reportedly said that the penalty amounts to over 1.34 lakh Canadian dollars and is attributed to Infosys' alleged underpayment of employee health tax for the fiscal year ending December 31, 2020.

Infosys, headquartered in Bengaluru, received an official order from Canada's Finance Ministry last week outlining the penalty. The order specifies that the penalty amount of 1,34,822.38 Canadian dollars has been imposed on the company.

In its regulatory filing, Infosys acknowledged the penalty, citing it as related to the alleged underpayment of Employee Health Tax for the mentioned fiscal year. However, the company stressed that this fine would not significantly impact its financials, operations, or other activities.

With a substantial presence in Canada, Infosys operates from multiple office locations across the country, including Alberta, Mississauga in Ontario, Burnaby in British Columbia, and Ottawa in Ontario.

The Employee Health Tax (EHT) is a compulsory payroll tax mandated for employers in certain Canadian provinces such as Ontario and British Columbia. Calculated based on various forms of employee compensation like salaries, bonuses, taxable benefits, and stock options, the EHT aims to contribute to the funding of healthcare services within the respective provinces.

In Ontario, for instance, EHT is payable by employers for employees who work at the employer's permanent establishment in Ontario, are associated with the employer's establishment in Ontario, or receive payment from or through an Ontario permanent establishment, regardless of physical work location.