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: Whether janitorial staff who work 4 hours a week, 5 days a week, may be considered "full-time employees" for the purpose of the definition of "specified investment business" in subsection 125(7)
Position: No.
Reasons: Plain meaning of the term.
February 14, 2001
Vancouver Island Tax Services Office HEADQUARTERS
Verification and Enforcement Division J. Gibbons, CGA
(613) 957-2135
Attention: Scott Gray
2000-006189
Specified Investment Business - "Full-Time Employees"
We are replying to your memorandum, which we received December 18, 2000, concerning the issue of whether janitorial staff who work 4 hours a week, 5 days a week, may be considered "full-time employees" for the purpose of the definition of "specified investment business" in subsection 125(7) of the Income Tax Act (the "Act"). In this regard, you enclosed a copy of a Tax Court decision, Ben Raedarc Holdings Limited et al. v. the Queen (98 DTC 1218), and the CCRA's proposal for settlement issued to Ben Raedarc Holdings et al. with respect to the latter's appeal to the Federal Court of Appeal.
The CCRA does not accept the Tax Court's view in Ben Raedarc et al. that the janitorial staff who worked four hours per day, five days per week, throughout the years in question, constituted full-time employees. XXXXXXXXXX.
If, as you stated, the facts in the current years are identical, it is our view that the particular taxpayers should be assessed on the basis that any janitorial staff they employed for four hours per day, five days per week, are not full-time employees for purposes of the definition of "specified investment business" in subsection 125(7) of the Act.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your
client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. You may request this latter version by contacting Jackie Page at (613)957-0682, who will send the severed copy to you for delivery to the client.
John Oulton, CA
Manager
Business and Individual Section
Business and Partnerships Division
Income Tax Rulings Directorate
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