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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
1. Is the XXXXXXXXXX regarded as an incorporated municipality or a body similar to that of a municipal utilities board, commission or corporation for purposes of subsection 81(3) of the Act?
2. Is the XXXXXXXXXX eligible to provide a municipal officers' expense allowance under subsection 81(3) of the Act?
Position TAKEN:
1. Yes.
2. Yes.
Reasons:
1. XXXXXXXXXX is providing services normally provided by a municipality and is governed by a Board of XXXXXXXXXX directors, XXXXXXXXXX . Therefore, the XXXXXXXXXX is a "a body similar to that of a municipal utilities board, commission or corporation".
2. Directors of XXXXXXXXXX are not elected to their positions. However, they are appointed to their positions on the XXXXXXXXXX by virtue of their elected positions on other bodies (see Issue Sheet).
XXXXXXXXXX 2000-003473
T. Young, CA
January 15, 2001
Dear Sir:
Re: Municipal Officers' Expense Allowance
This is in reply to your letter of June 20, 2000, requesting a ruling as to whether the XXXXXXXXXX is eligible to provide a municipal officers' expense allowance under subsection 81(3) of the Income Tax Act (the "Act"). Specifically, you asked if the XXXXXXXXXX is regarded as an incorporated municipality or a body similar to that of a municipal utilities board, commission or corporation for purposes of subsection 81(3) of the Act. Secondly, you asked if the XXXXXXXXXX is eligible to provide a municipal officers' expense allowance under subsection 81(3) of the Act.
XXXXXXXXXX
In a ruling dated XXXXXXXXXX, 1998, Revenue Canada determined that the XXXXXXXXXX is a public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) of the Act.
Advance income tax rulings are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R3. However, we are prepared to provide the following comments which are not binding on the Canada Customs and Revenue Agency.
Subsection 81(3) of the Act states in part:
Where a person who is
(a) an elected officer of an incorporated municipality,
(b) an officer of a municipal utilities board, commission or corporation or any other similar body, the incumbent of whose office as such an officer is elected by popular vote (our emphasis), or
(c) a member of a public or separate school board or similar body governing a school district,
has been paid by the municipal corporation or the body of which the person was such an officer or member (in this subsection referred to as the person's "employer") an amount as an allowance in a taxation year for expenses incident to the discharge of the person's duties ...
It is our general position that a board, commission, etc. that is established by a province is not a municipal utilities board, commission or corporation but could be a "similar body" provided that it can be regarded as being akin or equivalent to a body established at the municipal level of government. Once this is verified it must also be confirmed that the member of the body became such a member either by election by popular vote directly into the position, by becoming a member ex officio because of an election by popular vote to some other body, or by being elected by popular vote for the purpose of being appointed to a similar body.
Based on a review of the XXXXXXXXXX, we are of the view that the XXXXXXXXXX is an entity described in paragraph 81(3)(b) of the Act. XXXXXXXXXX sets out the composition of the board of directors of the XXXXXXXXXX. Although all board members are appointed to their positions, they are only eligible for appointment if they occupy other positions that are elected by popular vote. Therefore, it appears that the XXXXXXXXXX is eligible to pay a municipal officers' expense allowance under paragraph 81(3)(b) of the Act.
We trust our comments will be of assistance to you.
Yours truly,
J. Wilson, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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