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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Canadian Tax Foundation Round Table
(November 1992 Conference)
Question 29
Canadian employees of many Canadian subsidiaries ("Canco") of U.S. corporations ("USCo") participate in U.S.stock option plans governed by section 7 of the Income Tax Act. In some cases, Canco will make a payment to USCo (which had granted the stock option and issued the stock to the Canadian employee) in order to compensate USCo for the benefit conferred on one of Canco's employees.
Is the payment by Canco to USCo deductible by it in computing its
income?
Our Comments:
No it is not. S. 7(3) of the Income Tax Act prevents any deduction by Canco in respect of the employee benefit.
Darlene Patrick, September 30, 1992, File #922934 Document type "9" Applicable Sections 7, 7(3)
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