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.
June 23, 1998
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter of March 9, 1998, concerning the taxation of employer-paid tuition.
There are provisions in the Income Tax Act relating to the taxation of employee benefits, and the tax treatment of employer-paid training is set out in Interpretation Bulletin IT-470R, Employees' Fringe Benefits. This bulletin indicates that tuition fees paid for, or reimbursed by an employer are not considered to be 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.
To clarify this matter, departmental officials have completed a review of situations when employer-paid training results in a taxable benefit. This review involved consultation with other interested parties such as the Business Council on National Issues, the Tax Executive Institute and the Canadian Payroll Association. Based on the comments received from these parties, Revenue Canada has developed new guidelines to determine the primary beneficiary of training. These new guidelines were released in Income Tax Technical News No. 13 on May 7, 1998. A copy of this newsletter has been enclosed for your information.
I trust you will find my comments helpful.
Yours sincerely,
Herb Dhaliwal, P.C., M.P
Attachment
Karen Power
May 22, 1998
957-8968
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