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XXXXX
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P. Tang
XXXXX File: 11585-32
XXXXX
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Dear Sir:
This is in reply to your letter and further to your telephone conversation with Mr. Phil Tang of my staff concerning the possible application of the department's Technical Interpretation Bulletin TIB B-032R to a long-term disability plan. We apologize for the delay in replying to your letter which was necessitated as a result of a thorough review of this area both within the department and with officials of the Department of Finance.
It is our understanding that XXXXX maintains a long-term disability plan for its employees. The corporate sponsor, XXXXX, contributes funds into a trust which is administered by a third party trustee. Disability claims are processed by a benefits administrator at the company and the necessary payments are administered by the trust company out of the funds of the trust. You are enquiring as to whether, in this situation, the administrative position outlined in TIB B-032R may have application to XXXXX long-term disability plan.
It is the department's view that there is no legislative basis for extending this position to either multi-employer pension plans or to other employee benefit plans such as a long-term disability plan.
As you are of the view that there is a need for similar treatment to be accorded other employee benefit plans such as long-term disability plans for GST purposes, you may wish to discuss your concerns with the Department of Finance which is responsible for tax policy and for proposing changes to tax legislation. In this regard, you may wish to contact Mr. Andrew Marsland who is the official at the Department of Finance responsible for tax policy in this area.
We trust our comments are of assistance to you.
Yours truly,
J. Sitka
A/Director
Financial Institutions Division
GST Rulings and Interpretations Directorate
Policy and Legislation Branch
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