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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Whether bus passes for a municipal operated transit system, which are made available to all employees of the municipality, would be a taxable benefit pursuant to paragraph 6(1)(a) of the Act.
Position:
Yes.
Reasons:
Subsection 6(1)(a) & IT-470R - While passes offered to employees directly employed by the municipal transit company fit within the administrative position outlined in paragraph 43 of IT-470R, this position would not extend to all employees of the municipality since they are not considered to be "employees of bus and rail companies."
December 7, 2001
Mr. Andre Potvin HEADQUARTERS
Revenue Collections Directorate Randy Hewlett, B.Comm.
Trust Accounts Division 613-957-8973
25 McArthur Road
Attention: Mr. Germain Ouellette
2001-009954
Technical Interpretation Request - Bus Passes Municipal Employees
We are writing in response to your e-mail of August 16, 2001 for our opinion on whether bus passes for a municipal operated transit system which are made available to all employees of the municipality would be a taxable benefit pursuant to paragraph 6(1)(a) of Income Tax Act (the Act).
The Act requires that the value of all benefits from employment is to be included in an employee's income. This would include the value of bus passes provided to employees of a municipality for use of the municipal transit system. Paragraph 43 of Interpretation Bulletin IT-470R Employees' Fringe Benefits, dated April 8, 1988 indicates: "employees of bus and rail companies will not be taxed on the use of passes". This is an administrative position that would not apply to all employees of a municipality, but only to those that are directly employed by the municipal transit company.
We trust our comments are of assistance.
Marc Vanasse, CA
Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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