Regulation 100

Subsection 100(1)

Employer

See Also

Des Groseillers v. Agence du revenu du Québec, 2019 QCCQ 1430

Opco paid directors’ fees of Pubco parent as agent

All the shares of an operating corporation (“ATBM”) were held by a publicly-listed holding company (“BMTC”). ATBM paid the attendance fees of the outside directors of BMTC and included those amounts in what it reported for Quebec (“FDRCMO”) payroll taxation purposes. BMTC had not opened any source deduction or payroll account for taxation purposes.

In confirming the ARQ assessments of BMTC to add those amounts instead to its payroll, Bourgeois, JCQ stated (at paras. 120-121, TaxInterpretations translation):

[I]t appears incontestable that ATBM had the mandate to pay the source deductions for the account of BMTC. …

[P]ermitting the consolidation, within a single corporation, of tax charges related to remuneration of employees or directors of different corporations would risk … the inducing of an erosion of FDRCMO assessments which usually would be separately assumed by the corporations.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(b) no s. 7(1)(b) application to option cash-out amount assignments 494
Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(a) no s. 69(1)(b) application to s. 7(1)(b) dispositions 381

Remuneration

See Also

Coopers & Lybrand Limitéé v. MNR, 94 D.T.C 1626 (TCC)

The appellant took possession on November 4, 1981 of the business of a debtor and, with the banks' authorization, paid the net amount of the employees' back wages pursuant to the usual payroll procedures of the debtor (including the preparation of payroll slips showing the deduction of source deductions). Before receiving the payments, the employees were required to assign all rights to their wages to the appellant.

Tremblay TCJ. found that the assignment did not change the nature of the claim that was paid (i.e., wages) and that even if the nature of the claim changed as a result of the assignment, the amounts received by the employees were "in respect of" salary or wages.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.3) 165

Administrative Policy

24 September 2015 External T.I. 2013-0495611E5 - Withholding on incentive payments to non-residents

no withholding on payment to non-resident employee of 3rd party

A Canadian resident manufacturing corporation ("Canco") pays the non-resident employees ("Dealer Employees"), of non-resident dealers selling its products outside Canada, incentive payments ("Incentive Payments") for each warranty registered on Canco's products. Are the Incentive Payments subject to withholding or to a reporting obligation? After referring to the commission branch of the "remuneration" definition, CRA stated:

Whether Canco and the Dealer Employees have an employer/employee relationship, as developed through Canadian common law, is a question of fact. Provided no such relationship exists, the Incentive Payment would not meet this definition and Regulations 102 and 103 should not apply to require Canco to deduct or withhold any amount from the Incentive Payments… .

Notwithstanding that no withholding tax is required… where there is no employer/employee relationship…Canco would still be required to file an information return (T4A…)… .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(iii) no withholding on payments based on sales warranties sold by dealers 120
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(1) T4A reporting of payments to non-resident employee of 3rd party 72

13 June 2003 TI

Where a lawyer, who is a member of a professional partnership, is a director of a corporation, the director's fees paid to him will not be subject to source deductions if it is the partnership that has earned those amounts.

8 October 1996 T.I. 962701 (C.T.O. "Loss of Employment, Mental Distress, Damages")

Reimbursements of the legal fees incurred in a wrongful dismissal action are not "remuneration".

18 June 1993 T.I. (Tax Window, No. 32, p. 10, ¶2603)

A plan under which sick leave benefits to which an employee is entitled under the terms of an employment contract or collective agreement are paid to her through an employee benefit trust will be considered to give rise to salary or wages and, therefore, will be subject to the usual deductions for UIC and CPP.

4 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2425)

Payments made by an employer to an employee profit sharing plan are subject to source deductions.

Ladd, "Verification and Collection Issues", 83 C.R., p. 771

Although RC's position is that "payment" is to be read in a broader context than a mere exchange of cash, RC recognizes that it would be unreasonable to insist upon deductions from non-cash benefits when there is not an accompanying cash payment. Therefore, RC will waive withholding where there is no accompanying cash payment or when deducting would cause undue hardship.

Subsection 100(4)

Administrative Policy

21 July 1992 Memorandum 921453 (January - February 1993 Access Letter, p. 34, ¶C144-197)

An establishment of an employer would have many of the same characteristics as that of a permanent establishment, as defined in Regulation 400(2).

14 May 1991 T.I. (Tax Window, No. 3, p. 10, ¶1237)

Where a U.S. corporation sends its employees to a Canadian subsidiary for work assignments, and the employees report for work at the Canadian subsidiary but remain employees of the U.S. corporation, Regulation 100(4) will deem the employees to report for work at an establishment of the U.S. corporation outside Canada.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 5 60

Navigation