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.
930273
XXXXXXXXXX M. Eisner
(613) 957-2138
Attention: XXXXXXXXXX
April 28, 1993
Dear Sirs:
Re: Quarterly Instalments—Individuals
This is in reply to your letter of January 22, 1993 in which you requested our views on whether income taxes can be considered to have been deducted or withheld from certain income for the purposes of subsection 153(2) of the Income Tax Act (the Act).
You have set out a situation in your letter in which you computed a taxpayer's net income which includes director's fees. As this situation appears to relate to a specific taxpayer and involves events which have already occurred, you should contact your local District Taxation Office if you wish to obtain the Department's position thereon. We are, however, providing you with the following general comments.
Our Comments
An individual is not required to pay income tax instalments under subsection 156(1) of the Act if, for the purposes of subsection 153(2) of the Act, the total remuneration and other payments from which income taxes have been withheld or deducted represents at least 75% of the individual's income for the year. In relation to subsection 153(2) of the Act, subsection 153(1) of the Act provides that a person who makes certain types of payments is required to "deduct or withhold therefrom such amount ... and shall ... remit that amount on account of the payee's tax for the year". Consistent with this wording, it is our view that "nil" is not an amount of income taxes which have been deducted or withheld. In our view, it follows that where such is the case with director's fees, such fees would not be regarded as remuneration or other payments from which income taxes have been withheld or deducted for the purposes of subsection 153(2) of the Act.
We trust that the foregoing comments will be of assistance to you.
Yours truly,
P.D. Fuoco for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
cc: Source Deductions Division
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