Income Tax Severed Letters - 2016-12-28

Technical Interpretation - External

7 December 2016 External T.I. 2015-0569171E5 - Indian Employment Income

Unedited CRA Tags
81(1)(a) Income Tax Act; 87 Indian Act

Principal Issues: Whether income of Indian employees should be exempt.

Position: Question of fact, but not likely.

Reasons: See below.

15 November 2016 External T.I. 2015-0597921E5 - Subsection 138(11.94) election

Unedited CRA Tags
ITA 18(9)(a)(iii), 20(7), 138(11.5), 138(11.92), 138(11.94), ITR 1400(1), 1400(3), 1408(1)
insurance assets transferred to a subsidiary in consideration for assuming obligations of the insurance business could qualify as “reinsurance premiums”

Principal Issues: 1. The term “reinsurance premium” is not defined in the Act or Regulations. Does this term as used in paragraph 138(11.5)(m) of the Act mean the assets transferred in exchange for the assumption of the obligations under the transferred policies?
2. Does the term “reinsurance commission” used in paragraph 138(11.5)(m) of the Act carry the meaning as defined in subsection 1408(1) of the Regulations?
3. Confirmation of the tax implications for the transferor and the transferee where the transfer is made on a rollover basis pursuant to an election under subsection 138(11.94) of the Act and where the transfer is made on a taxable basis.

Position: 1. The term has a broader meaning.
2. Not necessarily.
3. Factual determination. General comments provided.

Reasons: 1. A “reinsurance premium” could include any amounts paid to the transferee as consideration for the assumed obligations in respect of the transferred insurance business.
2. Subsection 1408(1) of the Regulations applies for purposes of Part XIV of the Regulations. There is no explicit reference in the definition to paragraph 138(11.5)(m) of the Act. Further, unlike the definition of "reinsurance commission" in subsection 1408(1) of the Regulations, under paragraph 138(11.5)(m) of the Act, a "reinsurance commission" is described as an amount paid or payable by the transferee to the transferor.
3. Legislation.

Technical Interpretation - Internal

15 November 2016 Internal T.I. 2015-0577201I7 F - Employés du transport

Unedited CRA Tags
per kilometer “accommodation” allowances paid to long-haul drivers not in excess of their vouchered restaurant expenses were likely unreasonable
Words and Phrases

Principales Questions: Une allocation pour hébergement basée sur le kilométrage ou sur un montant fixe par jour, reçue par un employé conducteur de grand routier qui n’encourt aucune dépense pour se loger puisqu’il dort dans son camion, est-elle raisonnable et donc non imposable en vertu de 6(1)b)? / Is a lodging allowance based on the distance or on a fixed daily amount, received by an employee who is a long-haul truck driver who does not pay for lodging because he sleeps in his truck, a reasonable and tax-free allowance under 6(1)(b)?

Position Adoptée: C’est une question de fait mais probablement que l’allocation n’est pas raisonnable. / It is a question of fact but the allowance is likely not reasonable.

Raisons: Le caractère raisonnable d’une allocation se détermine cas par cas. / The reasonableness of an expense is determined on a case by cases basis.

6 June 2016 Internal T.I. 2015-0590411I7 F - Revenu d’emploi ou allocation de retraite

Unedited CRA Tags
5(1), 6(3), 56(1)a)(ii) et 248(1) déf. d’allocation de retraite et d’emploi
“salary” paid after employment duties had ceased was retiring allowance
"salary" paid after notice period was retiring allowance

Principales Questions: Les sommes versées par un employeur à un employé dont l’emploi prend fin sont-elles du revenu d’emploi ou une allocation de retraite? / Are amounts paid by an employer to an employee when the employment ends employment income or retiring allowances?

Position Adoptée: Question de faits / Question of facts

Raisons: Définition d’emploi et d’allocation de retraite au par. 248(1) / Definition of employment and retiring allowance in par. 248(1)