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.
24(1) 920366
A. Humenuk
(613) 957-2134
Attention: 19(1)
March 31, 1992
Dear Sirs:
Re: Physical Fitness Facilities for Employees
We are replying to your letter of January 28, 1992 in which you ask whether a reimbursement for the cost of membership in a fitness club by an employer is considered to be a taxable benefit to the employees.
24(1)
Notwithstanding the many benefits to the employer mentioned in your letter, it is our view that it is the employee who derives the primary benefit from the use of physical fitness facilities. Nevertheless as stated in paragraph 33 of the attached Interpretation Bulletin IT-470R "Employee Fringe Benefits", the use of physical fitness facilities belonging to the employer does not generally give rise to a taxable benefit to the employee.
Where an employer arranges, for a fee, to have facilities at a fitness centre made available to his employees at little or no cost, it is a question of fact as to whether or not an employee has received a taxable benefit. If the fees paid are for the use of the facility only, and are not membership fees or dues as described in paragraph 18(1)(l) of the Act, the employee would generally not be considered to be in receipt of a taxable benefit. Where membership fees or dues are paid by the employer, such payment or reimbursement will be considered to be a taxable benefit to the employee unless the employer can establish that membership in the facility is primarily to the employer's advantage. Such a determination must be made on an individual basis and is clearly a question of fact.
We would caution that our comments are based solely on the information in your letter and should not be construed as an opinion on the facts in a particular existing situation. Should you wish to obtain such an opinion, you should contact the local district taxation office.
We trust our comments will be of assistance to you.
Yours truly,
J.A. Szeszyckifor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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