29 August 2001 External T.I. 2001-0087665 - PER-DIEMS BOARD MEMBERS

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:

Per-diem for service by a board of director's member: A conservation authority pays the per-diem directly to a municipality since the member represents the municipality and is remunerated by them for the representation.

(1) Is the per-diem income for the board member?

(2) Does a T4 have to be issued?

Position:

(1) No.

(2) No.

Reasons:

(1) The amount paid to the municipality is either a reimbursement of income they paid to the member or a payment for services rendered to the Board.

(2) The municipality will be responsible for issuing a T4 to the member for services provided to the municipality, which includes representation on the conservation authority board.

XXXXXXXXXX 	2001-008766
		Randy Hewlett, B. Comm.
August 29, 2001

Dear XXXXXXXXXX:

Re: Per-Diems For Board of Directors Members

We are writing in response to your letter dated June 1, 2001, wherein you requested our opinion on whether a per-diem relating to service by a member of the XXXXXXXXXX is taxable when paid to the municipality the member is representing, who remunerates the member for the representation.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R4, Advanced Income Tax Rulings, dated January 29, 2001. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following comments.

Where an individual receives a director's fee in the course of an office or employment, the amount is required to be included in income of the individual pursuant to paragraph 6(1)(c) of the Income Tax Act (the Act) in the year received. The payor is required to file a T4 information return and include the amount on a T4 slip to be issued to the recipient. This would include the per-diems paid to a member of a board of directors. The situation you describe is not remuneration paid to an individual for the purposes of paragraph 6(1)(c) of the Act, but represents either a reimbursement of a remuneration expense incurred by the municipality or a payment to the municipality for services provided to the Board. As a result, a T4 would not be required to be issued to the member or municipality for the per-diem. It would be the responsibility of the municipality to ensure the board member is issued a T4 for remuneration they pay, which would include any remuneration paid by the municipality for the member's representation on the board.

We trust our comments will be of assistance to you.

Yours truly,

Terry Young, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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