3 January 2002 Internal T.I. 2001-0109287 - GST DEDUCTIBILITY

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 GST paid by employer when it supplies taxable benefits to employees is deductible

Position: yes

Reasons: general rules of section 9

		January 3, 2002

	Toronto West Tax Services Office	HEADQUARTERS
		Denise Dalphy, LL.B.
	Attention: Peter Dosa
		2001-010928

Deductibility of GST

This is further to our (Dosa/Dalphy) telephone conversation on November 6, 2001 concerning our memorandum (2001-010172), dated October 11, 2001.

It is now our understanding that Fact #8 in our aforementioned memorandum is not correct, and that the employer may NOT claim input tax credits on the GST remitted. You have enquired whether this would change our earlier opinion

Our Comments

It continues to be our view that we are not aware of any factors that would preclude the employer from deducting the GST that it paid in connection with employee benefits provided by the employer. In our view, these payments would in most circumstances be deductible pursuant to the general rules of section 9 of the Income Tax Act. Further, the fact that T4A's may not have been issued by the employer in connection with the employee benefits would not change our opinion on the deductibility of the GST payments.

We hope this opinion will be of assistance.

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 Canada Customs and Revenue 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. Requests for this latter version should be made by you to Mrs. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.

Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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