12 December 1989 Ruling 59091 F - Staff Salary Deferral Leave Plan

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.

Dear Sirs:

Re:  Proposed Staff Salary Deferral Leave Plan (the "Plan") Advance Income Tax Ruling Request

This is in reply to your letter of November 3, 1989 wherein you requested a ruling in respect of the above-noted plan.

As discussed on November 30, 1989 19(1) Harding) a salary deferral leave plan does not have to be approved by the Department in order for it to comply with the provisions of Section 6801 of the Income Tax Regulations (the "Regulations"). Consequently an advance income tax ruling should not be necessary if the proposed plan is amended and administered as discussed below. Should you still desire a ruling, however, we must advise that it may only be provided when the procedures for its request are complied with. A proper request entails the provisions of all related documents for our review as well as an identification of all of the specific provisions of the Act in respect of which the request is to be considered. The procedures are discussed at length in our Information Circular I.C. 70-6R, a copy of which is attached for your reference.

24(1)

24(1)

The Department has determined that:

a)     U.I. premiums are to be based on the employee's gross salary before deferrals during the period of deferral and no premiums are to be withheld from the deferred amounts when paid to the employee during the leave period.

b)     C.P.P. premiums are to be based on the salary the employee actually receives during both the deferral period and the leave period. When the deferral amounts are paid to the employee by a trustee, that trustee is deemed to be an employer of that employee by the C.P.P. Act and is therefore required to pay the employer's contribution in respect of that employee. Where the trustee/employer recovers the employer's C.P.P. contribution from amounts otherwise payable to the employee, it is our view that such amounts will not be part of the employee's gross salary from that employer.

We trust these comments will be satisfactory to your needs.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate