Regulation 200

Subsection 200(1)

Administrative Policy

21 November 2016 Internal T.I. 2016-0675761I7 F - Obligation de produire un T4A

artists’ union must issue T4A slips to incorporated artists respecting benefits received from the union

2013-0507171I7 F indicated that where a producer paid fees under a contract of service with the corporation of an incorporated performing artist and also was obligated to pay dues directly to the artists’ union (the UDA) in addition to some UDA dues that it was required to deduct from the fees paid to the artist’s corporation and remit, the producer was required to issue two T4As for the respective amounts to the artist’s corporation (so that the full fee amounts including dues deducted at source were included in its business income) and to the artist (so that the additional dues were included in his or her employment income from the corporation qua employer).

CRA now amended this Technical Interpretation to indicate that the second T4A (relating to the employee benefit arising out of the dues paid to the UDA) was required to be issued by the UDA rather than the producer. In this regard, CRA stated:

As for the amounts [the producer] contributes to the UDA on top of those fees… it should not issue a T4A slip to the artist for those amounts, as it is not the producer who provides benefits to the artist but, rather, the UDA. With respect to the contributions paid by the UDA for the benefit of the artist, subject to the exceptions in subparagraph 6(1)(a)(i) of the Income Tax Act, the artist must include in the employment income earned from the Corporation the value of the benefits accruing from such contributions. In addition, the UDA or the COPAR Fund, depending on the legal effect of the arrangements, must issue a T4A slip to the artist including the sums paid as vacation pay.

30 March 2016 Internal T.I. 2014-0547931I7 F - Voyages offerts par une compagnie

company providing free trips to incorporated sales reps is required to T4A the individuals if they received the trip qua employee (but not shareholder) of their corporation

2012-0472211I7 concerned a Canadian company which provided free annual trips to southern resorts to high-performing brokers and sales agents of its products or services, who could be performing the services as individual proprietorships, or through personal corporations. The trips had a business portion including morning briefings on the company’s products and services.

CRA indicated that the company providing the trips should issue T4A slips to the individual proprietor, or to the individual receiving the trip as a benefit qua employee of the individual’s personal corporation – whereas no T4A slip is required if the trip was received as a benefit qua shareholder of the personal corporation (a distinction which in practice would be difficult or impossible for the trip provider to apply). If the trip was received qua individual proprietor, the full value of the trip was to be recorded on the T4A, whereas if the trip was received qua employee, only the value of the benefit was to be recorded.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Nature of Income full value of incentive trips, including business portion, included in income of recipient personal corporations 100

31 March 2017 External T.I. 2016-0675221E5 - T4A

No T4A for rent

Is an amount paid to an individual as rent for the use of a facility is considered an amount paid as a fee, commission or other amount for services and thus required to be reported on a T4A slip? In particular, an organization using independent contractors, to provide certain services (i.e. teaching and supervising) pays rent to an independent contractor who is the co-owner of its facilities. CRA responded:

[A]n amount paid as rent for the use of a property would normally not be considered a fee, commission or other amount for services described in paragraph 153(1)(g) of the Act.

Accordingly…there would be no T4A reporting requirement under subsection 200(1) of the Regulations with respect to the amount paid as rent.

9 March 2017 External T.I. 2016-0677351E5 - Withholding on remuneration paid to a non-resident

Reg. 104(2) exemption does not apply for T4 reporting purposes, subject to $500 exclusion

A corporation resident in Canada pays salary and director’s fees to a shareholder who is U.S.- resident individual, who is not in Canada in the course of performing his duties as employee and director, and participates in meetings from outside Canada using the telephone or internet. Is such employer required to prepare payroll slips (e.g., T4, T4A, T4A-NR)? After noting that such attendance by the non-resident individual would not constitute the performance of services in Canada, so that under Reg. 104(2), no withholding would be required, CRA stated:

[T]he corporation resident in Canada would be required to file a form T4 information return under subsection 200(1) of the Regulations in respect of the non-resident individual’s total remuneration. That being said, as outlined in Chapter 2 of RC4120…an employer is not required to fill out a T4 slip for an individual if the remuneration paid during the year is less than $500.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 104 - Subsection 104(2) non-resident director attending all Canadian board meetings by phone or internet is not subject to withholding 169

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

T4A reporting of payments to non-resident employee of 3rd party

A Canadian resident manufacturing corporation ("Canco") pays the non-resident 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 a reporting obligation? CRA stated:

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…)… .

See summary under Reg. 100(1) - Remuneration.

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 100 - Subsection 100(1) - Remuneration no withholding on payment to non-resident employee of 3rd party 135

16 March 2015 External T.I. 2014-0521791E5 - Estate Trustee Fees

trustee fees from a business subject to T4A reporting

CRA noted that if fees earned from an estate by a lawyer were income from a business, the estate would be required to prepare and file a T4A form.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Office trustee fees of a lawyer from office if appointed on personal grounds 189

7 November 2014 External T.I. 2014-0535591E5 F - Revenu travailleur autonome

expense reimbursements or allowances were subject to T4A reporting

A corporation incurs various expenses for the benefit of its representatives, who are self-employed, such as travel expenses, conferences, training, evening dance events, travel and accommodation for participation in social events, gift cards in recognition of years of service and financial support for business start-ups. Are such amounts business income to the representatives and, if so, must they recorded on a T4A? After noting that general principles for the inclusion of the amounts in the representatives under ss. 9 and 12(1)(x) applied, CRA stated that none of the exceptions to Reg. 200(1) were applicable.

7 March 2014 Internal T.I. 2013-0507171I7 F - Obligation de produire un T4A

dual T4A issuance for fees to artist's corporation and dues to her union
this was amended by 2016-0675761I7 F to indicate that union should instead issue the 2nd T4A

A producer who retains the services of an incorporated performing artist is required under the terms of the collective agreement with the Union des Artistes (UDA) to both withhold dues from the remuneration due to the Corporation of the artist and remit them to the UDA and also to pay additional dues directly to the UDA. (In 2012-0461711E5 F, CRA had concluded on the same facts that s. 56(2) did not apply to the additional dues paid to the UDA as the Corporation did not have any control over those payments.) CRA stated (TaxInterpretations transalation):

Subsection 200(1)…provides that any person who makes a payment described in subsection 153(1)…, for instance, "salary, wages or other remuneration" to a recipient, including...a corporation...must make an information return… . CRA limits this requirement to payments which exceed $500 for the same recipient during a year. … As for the additional amounts contributed to the UDA…[the producer] must issue a T4A to the artist for those amounts, in accordance with Guide RC4157, page 17, respecting a person who provides benefits to employees of a party with whom he has contracted… .For the artist, these contributions are a taxable benefit which he must include in employment income under paragraph 6(1)(a)…. As for the amounts withheld from the fees of Corporation,…even though those amount are presumed to be income of the artist for purposes of the Act on Professional Status…the producer must nonetheless issue a T4A to Corporation, which must include these amounts in its business income.

18 October 2013 External T.I. 2013-0494441E5 - Amending a T4A

requirement to correct erroneous T4A

What circumstances give rise to the need to amend a T4A? CRA stated:

Section 200… requires the payer to report the correct amount paid. If the amount reported is incorrect, regardless of the circumstance the payer has not technically complied with this requirement.

Accordingly (per the summary) "it should be amended to correct the error."

CRA went on to indicate that as the "T4A is a statement of what the payer believes the nature and amount of the payment to be…" the payer should not amend the T4A at the payee's request if the payer still considers it to be correct.

17 June 2008 Internal T.I. 2008-0276721I7 - Withholding requirements for non-resident employee

Canadian college with non-Treaty country "business" campus

A Canadian-resident post-secondary educational institution (the "College") established a campus in a country with which Canada does not have a Treaty and which does not impose any income tax on the employees of that campus. Employees (none of whom perform any duties of employment in Canada) include former residents of Canada.

The Directorate stated that although there was no requirement to withhold source deductions by virtue of Reg. 104(2):

[T]he College is required to make an information return in accordance with subsection 200(1) of the Regulations in respect of any payments described in subsection 153(1).

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 104 - Subsection 104(2) Canadian college with non-Treaty country "business" campus 188

30 October 2007 External T.I. 2007-022387 -

Discussion of Requirements to Issue T4As for Services Rendered

26 August 1993, T.I. (Tax Window, No. 33, p. 2, ¶2637)

"Person" as used in Part II of the Regulations includes a non-resident person.

Subsection 200(2)

Administrative Policy

7 October 2016 APFF Roundtable Q. 1B, 2016-0652761C6 F - T4A filing

no expanded relief from the broad T4A reporting requirements

In light of the wording of ITA s. 153(1)(g) and Reg. 200(2), there is a broad range of inappropriate circumstances where the issuance of a T4A is required – for, example, where a corporation pays an amount greater than $500 to its accountant for professional services. As another example, in 2015 CRA required the issuance of a T4A respecting fees paid by a dentist to professional advisors. What is the current status of the CRA study (referenced by it at the 2011 APFF Conference) of administrative practices respecting T4As? Can CRA provide an exemption from the requirement for issuing a T4A where the invoice for the services rendered (whether by an individual or corporation) bears a valid tax number (e.g., GST and QST registration numbers). CRA responded:

The CRA position remains unchanged regarding the requirement… in paragraph 153(1)(g)… .

[T]here is already administrative relief for the production of the T4A in specified limited circumstances such as:

i) where the payment made is less than $500, to the extent that no tax is withheld in respect of the amount, and
ii) where personal services are rendered to an individual by a professional or anyone else practising a trade, or if the services are rendered for the repair or maintenance of the principal residence of an individual.

[N]o administrative relief, other than as stated in the previous paragraph, is available regarding payments made by an enterprise for services.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(g) limited exceptions to T4A reporting 129

8 September 2015 External T.I. 2015-0584221E5 - T4A requirement- elementary scholarships

T4A requirement even where full scholarship exemption

In confirming that a private school (the "School") is required to issue T4A Slips to report scholarships paid to, or on behalf of, its elementary and high school students, CRA stated:

[T]here is currently no legislative provision or administrative position that waives the T4A reporting requirement when a scholarship or bursary is not required to be included in the recipient's income (that is, when a full scholarship exemption is available).

S2-F1-C1 - Health and Welfare Trusts

1.55 For administrative simplicity, the taxable benefits provided by a health and welfare trust to employees should be reported by the trustee on a T4 slip or T4A slip, and not on the T3 Supplementary. The trust is required to withhold income tax from taxable benefits paid to employees.

23 July 1992 Memorandum 922191 (April 1993 Access Letter, p. 128, ¶C5-188)

Where both an employer and Agriculture Canada were paying a portion of a rent differential allowance to an employee, each would be considered an employer for purposes of the requirement to withhold tax and to report the benefit on a T4 supplementary slip.

Subsection 200(3)

Administrative Policy

2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.7, 2016-0674811C6 F - Allocations automobiles & dépenses afférentes

correction of T4s

In the context of a general discussion of the course of action to be followed where an employer subsequently determines that T4 slips issued by it were erroneous, CRA stated:

Where an employer realizes that a mistake has been made, the employer must normally prepare modified T4 slips to correct the situation. Changes can be made via the internet or by producing new paper slips that will be sent to the CRA. In both cases, a copy of the amended T4 slips must be sent to all affected employees so that they can request an adjustment to their income tax return for the particular taxation year. When an employee wishes to obtain an adjustment to an income tax return already filed for a particular taxation year that is within the normal reassessment period, the employee must request that CRA correct the income tax return by filing with the Tax Center, a T1-ADJ - T1 Adjustment Request form, duly completed, or a signed letter that provides all information respecting the request.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h.1) if vehicle allowance is too low, employee can include the allowance and deduct the vehicle expenses/T2200 production expected 275

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