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:
Employee Benefits for Airline Employees
Position:
General comments provided
Reasons:
Paragraph 6(1)(a), paragraph 42 IT-470R
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Elinor Caplan, Minister of National Revenue, has asked me to reply to your letter of December 18, 2001, addressed to her predecessor, the Honourable Martin Cauchon, concerning the income tax treatment of airfare for employees of a specific airline.
The position of the Canada Customs and Revenue Agency (CCRA) about airline employees' transportation passes is set out in paragraph 42 of Interpretation Bulletin IT-470R, Employees' Fringe Benefits. I am attaching a copy of this bulletin, for your convenience. The bulletin explains that the passes available to airline employees are taxable if the employee travels on a space-confirmed basis, and is paying less than 50 per cent of the economy fare available on that carrier for that trip on the day of travel. The value of the benefit will be the difference between 50 per cent of the economy fare and any amount reimbursed to the carrier for that trip. However, when airline employees, travelling for personal reasons, occupy a vacant seat on the plane, the value of the pass is significantly less than the fair market value of the fare. As a result, and in view of the difficulty in calculating the amount of employee benefit under the circumstances, there is no taxable benefit to the employee.
The confidentiality provisions of the Income Tax Act preclude me from providing information concerning specific employers and their employees without written authorization. However, I assure you that the CCRA makes every effort to ensure that all employers comply with the provisions of the Act and report employee benefits. The CCRA's compliance strategy is built on a balanced approach, which includes educating taxpayers about their obligations and entitlements, promoting the self-assessment system, and applying an enforcement methodology based on risk assessment criteria.
I trust the information provided is helpful.
Yours sincerely,
Bill McCloskey
Assistant Commissioner
Policy and Legislation Branch
Attachment
Randy Hewlett
957-8973
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