CRA reverts to allowing employees to purchase merchandise at cost

In Folio S2-F3-C2, CRA stated:

When an employee receives a discount on merchandise because of their employment, the value of the discount is generally included in the employee’s income under paragraph 6(1)(a). The discount may be provided by the employer or by a third-party. The value of the benefit is equal to the fair market value of the merchandise purchased, less the amount paid by the employee. However, no amount is included in the employee’s income if the discount is also available to the general public or to specific public groups. [emphasis added]

This Folio was then removed from the CRA site with a notation that it was under review.

A Ministerial letter mailed in March states:

[T]he CRA has a longstanding administrative policy that employee discounts on merchandise are generally not taxed. This policy is still in place and is explained in Guide T4130.

Guide T4130 currently states that employee merchandise discounts generally are not taxable benefits unless:

You [the employer] make an arrangement that allows an employee to buy merchandise (other than old or soiled merchandise) for less than your cost

Until recently, the word we have bolded referred instead to “fair market value.”

In a similar vein, another March Ministerial letter states:

The media reports also led to confusion about the taxation of subsidized meals for employees. The CRA does not consider these meals a taxable benefit if the employee pays a reasonable charge. A reasonable charge is one that covers the cost of the food, its preparation, and service.

Neal Armstrong. Summary of 5 March 2018 Ministerial Correspondence 2017-0726641M4 under s. 6(1)(a) and of 21 March 2018 Ministerial Correspondence 2017-0729161M4 under s. 6(1)(a).