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 a taxable benefit, such as a standby charge, received by a municipal officer is included in the term "salary and other remuneration" for the purposes of subsection 81(3) of the Act.
Position TAKEN:
No.
Reasons FOR POSITION TAKEN:
Taxable benefits such as the computed standby charge is not considered as an amount "paid" as salary or other remuneration as required by his contract of employment.
950321
XXXXXXXXXX J.A. Szeszycki
Attention: XXXXXXXXXX
June 26, 1995
Dear Sirs:
Re: Municipal Officers' Expense Allowance
This is in reply to your letter of February 2, 1995 in which you requested clarification as to whether taxable benefits received by a municipal officer are included as salary and other remuneration for the purposes of the computation of the tax free portion of the expense allowance under subsection 81(3) of the Income Tax Act (the Act). We apologize for the delay in providing you with a response.
In your letter you have set out a hypothetical situation in which an elected municipal officer is provided with a vehicle by the municipality resulting in an assessment of a standby charge benefit under paragraph 6(1)(e) of the Act as well as an operating cost benefit under paragraph 6(1)(k) of the Act. You have asked whether these benefits are to be included as "salary and other remuneration", as that term is intended to be used in subsection 81(3) of the Act.
Subsection 81(3) of the Act provides that where an elected municipal officer has been paid an allowance for expenses incident to the discharge of the duties of that office, the extent to which the allowance may be excluded from income is limited to 1/2 of the amount that was paid to the officer by the municipality as salary or other remuneration. The words "paid...as salary or other remuneration" as used in the provision refers, in our view, to amounts that are fixed and required to be paid such as those amounts which are generally described in paragraph 3 of IT-292.
Consequently, benefits that are provided to employees, but not paid as a salary or as other remuneration or as a benefit paid in lieu of a fixed amount of salary or remuneration payable, would not be considered in the computation of the excluded portion of expense allowances under subsection 81(3) of the Act.
We hope our comments will help to clarify the Department's position in this matter.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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