|
XXXXX
|
P. Tang
XXXXX 11585-32
XXXXX
|
This is in reply to your memorandum and our subsequent telephone conversation with XXXXX of your office concerning an enquiry you received from XXXXX with respect to the above-noted subject. We apologize for the delay in replying to your memorandum 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 the facts of the situation based upon your memorandum and correspondence and discussions with XXXXX is as follows:
An employer may establish a fund, administered by a financial institution as trustee, to provide long-term disability coverage for its employees. The fund will be established as a result of an obligation of the employer as provided for in a collective agreement, employment contract or other binding document. The fund will distribute benefits to employees in the event of illness, injury, or other incapacitation. In establishing the fund, the employer may incur costs related to legal services, actuarial service, retention of the trustee, investment management and other administrative inputs.
XXXXX is enquiring as to whether, in the above situation, the department's administrative position contained in TIB B-032R which applies to single employer sponsored pension plans can be applied to long-term disability plans such as the one outlined above.
It is the department's position that there is no legislative basis for extending the position enunciated in TIB B-032R to long-term disability plans or to other types of employee benefit plans such as health and welfare trusts.
Accordingly, in the situation outlined above, the employer is not entitled to claim ITC's on expenses relating to the plan.
Should you wish to discuss this matter further, please contact Phil Tang at (613) 954-1433 or Duncan Jones at (613) 952-9210.
J. Sitka
A/Director
Financial Institutions and Real Property Division
GST Rulings and Interpretations
Email this Content