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.
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Herb Dhaliwal, Minister of National Revenue, has asked me to reply to your letter of March 26, 1998, concerning the application of income tax to employer-paid training.
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 where employer-paid training results in a taxable benefit. This review involved consultation with various industry associations and other interested parties. Based on the comments received, 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 is enclosed for your information.
Thank you for bringing your concerns to the Department’s attention.
Yours sincerely,
Denis Lefebvre
Assistant Deputy Minister
Policy and Legislation Branch
Attachment
Karen Power
980978
May 14, 1998
957-8968
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