21 March 2001 External T.I. 2001-0071185 - INTERNET SERVICE AT HOME PAID BY EMP.

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 a taxable employment benefit is received by virtue of the employer paying for internet service at home.

Position: In the situation outlined, it is unlikely that there is any significant taxable employment benefit as a result of having the internet service in the employee's home to assist him in carrying out his employment duties.

Reasons: Little or no personal benefit.

XXXXXXXXXX 	J. Gibbons, CGA
		2001-007118
March 21, 2001

Dear XXXXXXXXXX:

We are replying to your letter dated February 15, 2001, in which you enquired whether a taxable employment benefit will be attributable to you by virtue of your employer paying for your internet service at home.

As requested, we have considered the situation outlined in your letter and have provided some comments below. However, we cannot confirm the tax implications of particular transactions unless the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4. Thus, our comments are of a general nature only.

Facts

• You are a member of the faculty of XXXXXXXXXX (the "College"), a public post-secondary institution in XXXXXXXXXX.
• You use the internet at home for purposes of research, course development, and professional development.
• The College has included the cost of the internet service as a taxable employment benefit.

It is your opinion that the employer-paid internet service is primarily for the benefit of the College and thus should not be treated as a taxable employment benefit in your hands.

Our comments

Except where the Income Tax Act provides otherwise, taxpayers are generally taxable on the value of all benefits they receive by virtue of their employment. However, in the situation outlined, it is unlikely that there is any significant taxable employment benefit as a result of having the internet service in your home to assist you in carrying out your employment duties.

The issue of reporting employment income, including taxable employment benefits, is the responsibility of your employer. Accordingly, you should consult with the College if you disagree with the way employment benefits were reported. If you and your employer cannot agree on this issue, we suggest that you contact officials in your local tax services office to assist you in this matter.

We trust that these comments will be of assistance.

Yours truly,

John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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