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.
Principal Issues:
Whether or not the interest income accrued is employment or property income
Position TAKEN:
The acruued income is employment income in which T4s must be issued
Reasons FOR POSITION TAKEN:
Long standing position
5-950169
XXXXXXXXXX M.P. Baldwin
Attention: XXXXXXXXXX
March 1, 1995
Dear Sirs:
Re: Deferred Salary Leave Plan
This is in reply to your letter of January 19, 1995 requesting a written opinion concerning the XXXXXXXXXX Deferred Salary Leave Plan (DSLP) and the payment and reporting of interest earned in the DSLP.
The provisions of the Income Tax Act do not permit the treatment of any income under a DSLP as income from property, rather such income under the plan represents employment income and must be paid and reported to a participant as employment income. A T4 form should be used by the plan trustee or employer as the case may be to report the earnings and the usual withholdings and remittances must be made.
It is acceptable to the Department if the plan provides that the participant recontribute the amount of annual interest accrual to the plan and be paid out during the deferral period or upon termination of the participant in the plan.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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