CRA confirms that a group company can have one payroll account with CRA as agent for the various group companies
Among the updates in 2021 to its Q&A page on CEWS:
- CRA indicates that the companies in a group can continue to have one group entity handle the payroll matters (e.g., source deductions, and presumably also T4 reporting) – in one payroll account with CRA in its name - for employees that it pays as agent for other group companies even where the other group companies were required to open up their own payroll accounts with CRA to make CEWS claims.
- CRA provides an example concerning a TSX-listed corporation whose executive compensation disclosed on Form 51-102F6 (pursuant to National Instrument 51-102) increased from $4,500,000 in 2019 to $8,000,000 in 2021 and which claimed wage subsidies totaling $4,000,000 in periods 17 to 20. It is required to repay the executive compensation repayment amount of $3,500,000 ($8,000,000 - $4,500,000) in accordance with an ordering rule, whereby later wage subsidy amounts are required to be repaid first, until the total equals the eligible employer’s executive compensation repayment amount.
- CRA now provides the registry listing the over 408,000 corporations that have applied for the CEWS, including around 90,000 numbered companies. This doubtless is diverting CRA audit resources.
Neal Armstrong. Updated summaries of Frequently asked questions - Canada emergency wage subsidy (CEWS) CRA Webpage 24 September 2021 under s. 153(1)(a), s. 125.7(1) – qualifying revenue, executive compensation repayment amount and s. 241(3.5).