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:
Will administrative position regarding withholding taxes and shares received under a stock option be extended to withholding taxes and shares received under an employee benefit plan?
Position: N/A
Reasons:
Administrative positions re withholding taxes is the responsibility of Trust Accounts Division (formerly the Source Deductions Division). Letter forwarded to them for their consideration.
December 17, 1997
HEADQUARTERS HEADQUARTERS
Trust Accounts Division M.P. Sarazin
A. Bissonnette 957-3499
Director
Attention: Jim Ivey 973157
Withholding Taxes on Shares Distributed
from an Employee Benefit Plan
We have enclosed a copy of a letter from XXXXXXXXXX dated November 26, 1997, wherein they ask whether the Department has or will extend its current position on withholding taxes required in respect of the benefit resulting from the issuance of shares under a stock option, as expressed in our response to Question 65 at the 1991 Canadian Tax Foundation Round Table, to the employment benefit resulting from the distribution of shares of the employer from an employee benefit plan.
We have advised the taxpayer that its request for confirmation of the application of an administrative position with respect to withholding taxes has been forwarded to your Division for your consideration. We are not aware of the position ever having been extended to cover benefits resulting from share distributions from an employee benefit plan. Payments to employees out of an employee benefit plan are included in income as salary and wages under paragraph 6(1)(g) of the Income Tax Act (the "Act") and, as such, are subject to withholding taxes under paragraph 153(1)(a) of the Act.
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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