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.
March 11, 1998
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter of March 6, 1998, concerning the taxability of employer-paid training. I regret I was not able to take your earlier call.
There are provisions in the Income Tax Act relating to the taxability of employee benefits and the tax treatment of employer-paid training is set out in the long-standing published Interpretation Bulletin IT-470R "Employees' Fringe Benefits". As indicated in this Bulletin, tuition fees paid for or reimbursed by an employer are not a taxable benefit if the principal beneficiary of the training is the employer.
Most employer-paid training is directly related to job responsibilities and in these cases there is no taxable benefit. However, some training is clearly for the principal benefit of the employee and is taxed accordingly.
Given the apparent need for clarity on this matter, departmental officials have begun to review the criteria used in determining the principal beneficiary of training. I assure you that the Department's goal is the fair and consistent application of the Income Tax Act. The views expressed in your letter will be taken into consideration during our review. This review will also involve consultation with other interested parties such as the Business Council on National Issues and the Tax Executive Institute.
I understand that Mr. Roy Shultis, Director General of the Income Tax Rulings and Interpretations Directorate, has been in contact with you regarding this matter and has advised you that he will be in charge of this review. Should you have any further questions, please do not hesitate to contact Mr. Shultis at 0-613-957-2132 collect.
I appreciate the opportunity to respond to your concerns.
Yours sincerely
Herb Dhaliwal, P.C., M.P
Minister of National Revenue
C.C. Minister’s Office
Political Assistant
Karen Power
March 9, 1998
957-8968
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