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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sir:
RE: Employee Service Awards
This is in reply to your letters of February 18, 1993 and May 10, 1993 which are further to our letter of January 8, 1993 sent to your company. The concern is whether employee service awards involving jewellery constitute benefits to employees.
In our letter of January 8, 1993, we provided general comments in which we indicated that an employee is considered to have received a taxable benefit where his or her employer provides him or her with a long term service award of jewellery and the employee acquires ownership of the jewellery at that time. In addition, we indicated that if the employer subsequently incurs an expense in adding to the value of the article of such jewellery that was previously awarded, the employee would also be considered to have received a taxable benefit at that time.
Following a review of the information in your letters, we have decided to maintain the above two positions as we are still of the view that taxable employee benefits are involved.
In order for the above benefits to be non-taxable, it would be necessary to amend the Income Tax Act. As amendments to the Income Tax Act fall within the responsibility of the Department of Finance, you may wish to contact that Department at the address set out below:
Department of Finance 140 O'Connor St. Ottawa, Ontario K1A OG5
We trust that the above comments clarify the Department's position on the matter you have raised.
Yours truly,
P.D. Fuoco for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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