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.
Principal Issues: What constitutes an employer's establishment?
Position: An employer's establishment is the place where an employee reports for work whether or not the employer has an establishment there.
Reasons: Regulation 100(4) & 102(1).
May 12, 2011
Trust Account Programs Division HEADQUARTERS
Income Tax Rulings
Attention: Marlene Sylvest, Manager Lindsay Frank
Policy and Legislative
Services Section (613) 948-2227
The Ambit of an Employer's Establishment
This is in reply to a request from Dian Hardiman for a technical interpretation as to what constitutes an employer's establishment for the purpose of deductions at source.
Paragraph 153(1)(a) of the Income Tax Act, R.S.C. 1985, c.1 (5th Supp.), requires an employer to withhold an amount from any remuneration that is being paid. Subsection 100(1) of the Income Tax Regulations, C.R.C., c. 945 (the "Regulations") defines "remuneration" to include salary or wages, or commissions or other similar amounts paid to an officer or employee.
Where an employee reports for work at an establishment of an employer in a province, subsection 102(1) of the Regulations provides the rules regarding the amount that the employer is required to deduct or withhold from remuneration pursuant to subsection 153(1) of the Act. However, if the employee is not required to report for work at any of the employer's establishments, subsection 100(4) of the Regulations contains a number of relevant deeming provisions.
If the remuneration is salary, wages, or commissions, the employee is deemed, under paragraph 100(4)(a), to report for work at the employer's establishment from which the remuneration is paid. For other types of remunerations, paragraph 100(4)(b) provides that the employee shall be deemed to report for work at the employer's establishment in the province where he or she resides. Paragraph 100(4)(b) further provides that if the employer does not have an establishment in that province, the employer shall be deemed to have an establishment there. In this respect, it should be noted that in subsection 35(1) of the Interpretation Act, R.S.C. 1985, c. l-21, the definition of "province" includes the territories, namely,Yukon, the Northwest Territories, and Nunuvut.
Should you have any questions or require additional information, please do not hesitate to contact Lindsay Frank at the number provided at the outset.
Insolvency and Administrative Law Section
International and Trusts Division
Income Tax Rulings Directorate
c.c. Dian Hardiman
Policy and Legislative Services Section
Trust Account Programs Division
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