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.
Principal Issues: The taxable status of income earned by an employee from an invention.
Position: Question of fact.
Reasons: The determination will depend on a number of factors, including ownership of the invention and the nature of the amounts received, which can only be made after a review of all relevant documentation.
Randy Hewlett, B.Comm.
XXXXXXXXXX 613-957-8973
2004-006344
March 22, 2004
Dear XXXXXXXXXX:
Re: Income From Employee Inventions
We are writing in response to your letter of February 19, 2003, wherein you asked for our opinion on the above-noted issue.
A determination of the taxable status of income earned by an employee from an invention can only be made after a complete review of all the facts and documentation surrounding the particular situation. This determination will depend on a number of factors, including ownership of the invention and the nature of the amounts received, as discussed in Interpretation Bulletin IT-316, Awards for Employees' Suggestions and Inventions.
Since this Directorate only provides written confirmation of the tax implications inherent in particular transactions that are proposed and the subject matter of an advance income tax ruling request, we are unable to provide you with definitive comments on the tax implications of the situation described in your letter. However, we would be pleased to consider your request in the context of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated
May 17, 2002. If the particular transactions described in your letter are completed, the relevant Tax Services Office may be of further service in addressing your inquiry.
The documents referred to above may be found on our web site at www.ccra.gc.ca. We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2004
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2004
Email this Content