Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether the CRA considers that the definition of “salary or wages” in subsection 248(1) of the Income Tax Act (the Act) applies to paragraph 153(1)(a) of the Act, which requires withholding on “salary, wages or other remuneration”?
Position: Yes.
Reasons: When interpreting “salary, wages or other remuneration” used in paragraph 153(1)(a) of the Act the definition of “salary or wages” in subsection 248(1) of the Act applies.
XXXXXXXXXX
2017-073548
J. Ouimet, CPA, CA
May 22, 2018
Dear XXXXXXXXXX:
Re: Subsection 248(1) “salary or wages”
We are writing in reply to your email dated December 2, 2017, in which you asked whether the Canada Revenue Agency (the “CRA”) considers that the definition of “salary or wages” in subsection 248(1) of the Income Tax Act (the “Act”) applies when interpreting paragraph 153(1)(a) of the Act, which requires withholding on “salary, wages or other remuneration”.
This technical interpretation provides general comments about the provisions of the Income Tax Act. It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.
Our Comments
Paragraph 153(1)(a) of the Act, in combination with section 101 of the Income Tax Regulations (the “Regulations”), requires that every person paying salary, wages or other remuneration (with certain exceptions) must deduct or withhold from the payment the amount determined in accordance with prescribed rules.
Further, subsection 102(1) of the Regulations requires withholding on “remuneration”, which is defined in subsection 100(1) of the Regulations and includes a payment that is in respect of “salary or wages”.
“Salary or wages” is defined in subsection 248(1) of the Act to mean, subject to certain exclusions, “the income of a taxpayer from an office or employment as computed under subdivision a of Division B of Part I and includes all fees received for services not rendered in the course of the taxpayer’s business but does not include superannuation or pension benefits or retiring allowances”.
It is our view that when interpreting “salary, wages or other remuneration” used in paragraph 153(1)(a) of the Act, the definition of “salary or wages” in subsection 248(1) of the Act applies.
We trust our comments will be of assistance.
Yours truly,
Terry Young, CPA, CA
Manager, Administrative Law Section
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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