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: Taxability of employee awards
Position: General comments provided
Reasons: General comments provided
Human Resources and
Corporate Services Branch
Canadian International 5-990051
Development Agency David Shugar, CGA
200 Promenade du Portage
Hull, Quebec
K1A 0G4
Attention: Gaetane Bernier
Facilitator, Service and Innovation
January 13, 1999
Dear Ms. Bernier:
Re: Taxation of Employee Incentive Awards
We are writing in response to your enquiry of January 8, 1999 requesting our interpretation of the Income Tax Act with respect to employee incentive awards.
We can provide the following general comments about such awards.
Paragraph 6(1)(a) of the Income Tax Act provides that income from employment includes “the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment, ... ”
Revenue Canada’s current position regarding employee benefits is outlined in Interpretation Bulletin IT-470R, Employee’s Fringe Benefits.
We have previously reviewed the document entitled ‘Award Taxability’ prepared by Treasury Board on November 16, 1994 and had suggested a few changes. Those changes are reflected in the enclosed copy, updated as of October 1998, and reflects Revenue Canada’s current position regarding the taxation of the employee awards described therein.
In our phone conversations of January 8 and 11, 1999, you gave examples of your Internal Recognition Program such as instant, informal awards, and giving tickets to a work team for a job well done. Since these awards are based on performance, in our view the employee incentive awards you describe would be taxable benefits in the employee’s hands.
We trust our comments will be of assistance to you.
Yours truly,
Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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