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.
October 7, 1999
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter of June 1, 1999, concerning the calculation of taxable benefits relating to transportation passes given by some airlines to their employees.
The Department follows the guidelines outlined in a Press Release issued by a former Minister of National Revenue, announcing that previously untaxed airline passes given to airline employees on a space confirmed basis would become taxable. The Press Release stated that the 50 per cent valuation rule is based on the fact that, at different times of the year, all air travellers, through various pricing structures such as charters, can get fares of between 40 per cent and 70 per cent of the regular economy rate.
If a pass only entitles the employee to travel on the airplane when there is a vacant seat, it is recognized that the value of the benefit to the employee is significantly less. In addition, there is little, if any, additional cost incurred by the airline. Since the value of the benefit is difficult to measure, and there is little cost to the employer in providing the passes, no benefit will be assessed in these circumstances.
I trust my comments have explained the Department's position on this matter.
Yours sincerely,
Bill McCloskey
Assistant Deputy Minister
Policy and Legislation Branch
Wayne Antle
957-2058
September 27, 1999
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