Translation disclaimer
This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.
Principal Issues: [TaxInterpretations translation] Must a centre de santé et de services sociaux [health and social services centre] ("CSSS") issue T4A slips for the following payments?
(1) Reimbursement of travel expenses incurred by CSSS physicians who, in the performance of their duties, have to travel to the homes of certain patients
(2) The payment of fees to physicians from non-resident patients of Canada - not covered by RAMQ - who consult the emergency department of the CSSS or who are sometimes hospitalized during their stay in Canada.
(3) The payment of fees to notaries, lawyers, architects and psychologists who may either issue invoices in their personal name or through their corporations
(4) The payment of sums to certain professionals who provide care (hairdressing, sewing, aesthetics, pedicure) to elderly persons in CSSS accommodation. The sums are initially collected by the CSSS from residents who have requested the services.
(5) The payment of a weekly salary to a priest for religious celebrations for the benefit of residents
(6) The payment of amounts to custodians as mandatary of a trust that administers the funds of a custodial service. The funds used to make these payments are paid by a government agency and are deposited directly into the CSSS's bank account.
What is the CRA's position on the following issues:
(7) With respect to the issuance of T4A's, is there a difference when the physician rendering the services is external to and independent of the CSSS as contrasted to a physician who usually practices for the CSSS?
(8) Does the CSSS have to include the GST charged by physicians in the T4A?
Position: (1) to (6) Yes
(7) The fact that the physician rendering the services is external and independent of the CSSS or that the physician usually practices for the CSSS could influence the type of slip to be issued. If the physician is an employee of the CSSS, the prescribed form is a T4 slip and if the physician is self-employed, a T4A slip is to be used.
(8) The CSSS should not include the GST/HST on the T4A slip unless it is impossible to distinguish between the amount of fees paid and the GST.
Reasons: (1) to (6) No administrative or regulatory exceptions referred to in subsection 200(1) are applicable.
(7) See guide RC4110
(8) See guide RC4157.
XXXXXXXXXX 2007-025532
Julie Racette
May 29, 2008
Dear Madam,
Subject: Information return / T4A slips
This is in response to your letter of October 10, 2007, in which you requested our opinion regarding the issuance of T4A slips to various professional service providers.
Unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
More specifically, you indicated that you work for a centre de santé et de services sociaux [health and social services centre] ("CSSS"). As part of the CSSS's activities, you wish to know whether it must issue a T4A slip for the following payments:
(1) Reimbursement of travel expenses incurred by CSSS physicians who, in the performance of their duties, must travel to the homes of certain patients
(2) The payment of fees to physicians from non-resident patients of Canada - not covered by RAMQ - who consult the emergency department of the CSSS or who are sometimes hospitalized during their stay in Canada.
(3) The payment of fees to notaries, lawyers, architects and psychologists who may either issue invoices in their personal name or through their corporations
(4) The payment of sums to certain professionals who provide care (hairdressing, sewing, aesthetics, pedicure) to elderly persons in CSSS accommodation. The sums are initially collected by the CSSS from residents who have requested the services.
(5) The payment of a weekly salary to a priest for religious celebrations for the benefit of residents
(6) The payment of amounts to custodians as mandatary of a trust that administers the funds of a custodial service. The funds used to make these payments are paid by a government agency and are deposited directly into the CSSS's bank account.
It is understood that all the professional service providers referred to above have self-employed status.
You also wish to know the CRA's position on the following two other issues:
1) As an employer, the CSSS must sometimes request the expertise of an external and independent physician to assess the state of health of its employees who are on long-term sick leave. With respect to the issuance of T4As, is there a difference where the physician rendering the services is external and independent or instead usually practices for the CSSS?
2) When physicians bill fees including GST, must the CSSS include the GST on the physicians' T4A slips?
Written confirmation of the tax consequences specific to particular transactions is provided by the Directorate only for proposed transactions that are the subject of an advance income tax ruling request. Where transactions are completed, the request for information should be directed to the appropriate Tax Services Office. We are, however, prepared to provide the following comments.
Subsection 200(1) of the ITR provides that every person who makes a payment described in subsection 153(1) of the Act shall make an information return in prescribed form (T4A slips and the corresponding T4A Summary) in respect of any payment so made in the course of their business, unless such a return has been made under sections 202, 214, 237 or 238.
Paragraph 153(1)(g) provides that every person who pays in a taxation year fees, commissions or other amounts for services, other than amounts described in subsection 115(2.3) or 212(5.1), shall deduct or withhold from the payment the amount determined in accordance with prescribed rules. Reimbursement of travel expenses is a payment described in paragraph 153(1)(g).
It should be noted that the obligation to make an information return in the circumstances described in Regulation 200(1) exists even if no provision of the Act or Regulation requires a deduction or withholding of tax at source. However, the Canada Revenue Agency (the "CRA") will not insist on the issuance of a T4A in the situations listed on page 4 of Guide RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary. CRA will also not require a T4A to be issued in the following circumstances:
- Where the payment made is less than $500, provided no tax is withheld in respect of the payment;
- Where services are rendered to an individual in the individual’s personal capacity, by a professional or any other person practising a trade, or where the services are rendered for the repair or maintenance of an individual's principal residence;
With respect to your first six questions, we are of the view that you must complete a T4A slip in each of the particular situations since no administrative or regulatory exception referred to in subsection 200(1) is applicable. In the situation where professionals bill their services to the CSSS through their corporations, we suggest that you enter the corporation's business number in box 13 of the T4A slip. We would also like to inform you that the CSSS must complete T4A slips for payments made to custodian as mandatary.
As for your last two questions, the fact that the physician rendering the services is external and independent of the CSSS or that the physician usually practises for the CSSS could influence the type of slip to be issued. If the physician is an employee of the CSSS, the prescribed form is generally a T4 slip, whereas if the physician is self-employed, a T4A slip should be used.
Furthermore, as a general rule, the CSSS should not include the GST/HST on the T4A slip, unless it is impossible to distinguish between the amount of fees paid and the GST.
For more information on a payer's responsibilities to issue a T4A slip, we refer you to Guide RC4157 "Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary - 2007". You can access the guide at the following Internet address: http://www.cra-arc.gc.ca/E/pub/tg/rc4157/READ-ME.html.
These comments do not constitute an advance income tax ruling and are not binding on the Canada Revenue Agency in respect of any particular factual situation.
Best regards,
François Bordeleau, LL.B.
Manager
Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate.
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