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.
5-8186
J.D. Jones
(613) 957-2104
19(1)
Dear Sirs:
Re: Interpretation Bulletin IT-428 Wage Loss Replacement Plans
This is in reply to your request received June 6, 1989 concerning a wage loss replacement plan wherein you requested the Department's opinion on whether a plan would be considered an employee-pay-all plan in the following situation.
The premiums for the indemnity coverage of a wage loss replacement plan is paid monthly by the employer to the insurance carrier. The cost of these premiums is deducted monthly from the employees' earnings. The cost is also included in the earnings of the employees.
Paragraph 17 of IT-428 makes the statement that it is a question of fact whether or not an employee-pay-all exists and onus is generally on the employer to prove the existence of such a plan. Whether or not such a plan exists would involve a finding of fact in each particular situation. As a consequence we are reluctant to express an opinion about a contractual arrangement without having access to specific contracts and other documentation concerning the arrangement. However, it would appear from the limited information submitted that the arrangement described above may qualify as an employee-pay-all plan in accordance with paragraph 17 of IT-428 .
The foregoing represents a general interpretation of the law and, as such, may not be applicable in every situation. Should you have a factual situation, you may wish to apply for a binding advance income tax ruling if a transaction is proposed, or consult the local District Taxation Office if the transaction has been completed.
Yours truly,
fro Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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