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:
taxation of free travel thru frequent flyer program
Position:
taxable to the extent points acquired thru employer paid travel
Reasons:
para 15 of IT-470
A. Humenuk
XXXXXXXXXX 960373
February 1, 1996
Dear XXXXXXXXXX:
We are writing in reply to the copy of your letter of December 12, 1995, addressed to XXXXXXXXXX that you sent to The Honourable David Anderson, former Minister of National Revenue, concerning frequent flyer points.
The Department's position on the taxation of fringe benefits received by an employee in the course of or by reason of employment is outlined in the attached Interpretation Bulletin IT-470R "Employees' Fringe Benefits". Paragraphs 14 and 15 discuss two of the points raised in your letter.
While not a new position, the taxation of the value of personal travel obtained by way of employment-related travel under a frequent flyer program was recently confirmed by the Tax Court of Canada in the case of Mommersteeg and Giffen vs The Queen (not yet reported in published form). In that case, the Court found that the free travel awards received by the appellants were benefits received or enjoyed in respect of employment and were taxable by reason of the ordinary meaning of the language used paragraph 6(1)(a) of the Income Tax Act.
We trust our comments have provided some clarification on the taxation of these employment-related benefits.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
c.c. Ministerial Correspondence Section
YS # 96-00347M
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