Words and Phrases - "reimbursement"

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8 July 2013 Internal T.I. 2012-0472651I7 F - Crédit pour l'embauche par les petites entreprises

small business job credit received for personal-care workers was “reimbursement”

A taxpayer who does not carry on a business and who hires and remunerates employees including a home care worker, and deducts source deductions and files T4 slips as required thereby generates the small business job credit ("SBJC"). The Directorate stated:

[P]aragraph 118.2(3)(b) generally provides that an individual must not treat as eligible medical expenses the expenses for which the individual is entitled to be reimbursed. An exception to this rule is where the amount of the reimbursement is required to be included in computing income and is not deductible in computing taxable income. Considering that the Act does not define the term "reimbursement", we are of the view that the SBJC amount could be considered a reimbursement for the purposes of paragraph 118.2(3)(b).

Words and Phrases
reimbursement
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business small business job credit received for payroll of non-business employees, exempt 103
Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(2) - Paragraph 118.2(2)(b.1) single service does not qualify as attendant care 68

8 February 1994 Memorandum 940065 (C.T.O. "Employment Expenses")

"A reimbursement is usually considered as a repayment of an expense actually incurred and an allowance implies an amount paid in respect of some possible expense without any obligation to account for any actual expense." Given this distinction, the phrase, "reimbursed in whole or in part" in s. 6(1)(b)(xi) would not include flat rate allowances.

Words and Phrases
reimbursement

Westcoast Energy Inc. v. The Queen, 91 DTC 5334 (FCTD), briefly aff'd 92 DTC 6253 (FCA)

Damages which the taxpayer received in settlement of its suit based on the direct and indirect costs incurred by it in replacing a defective pipe line were not subject to tax under s. 12(1)(x), given that such amounts were not a "reimbursement" for purposes of that section. "The ordinary and legal meaning of the word does not contemplate an award of damages" (p. 5341).

Words and Phrases
reimbursement
Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Resolving Ambiguity 78

Canada v. Canada Safeway Limited, 98 DTC 6060 (FCA)

In finding that a refund of federal sales tax that predecessors of the taxpayer previously had paid in error did not qualify as a reimbursement for purposes of s. 12(1)(x)(iv), Latourneau J.A. stated (at p. 6063):

"In the case of a refund of sums paid by error, there is, in my view, no flow of benefits between the respective parties: the money is simply returned to the payer. In addition, while the notion of reimbursement generally involves the intervention of a third party, that of refund implies the mere return of money between two parties."

Words and Phrases
refund reimbursement
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Timing 31

Newmont Canada Corporation v. The Queen, 2011 DTC 1117 [at 628], 2011 TCC 148, aff'd 2012 DTC 5138 [at 7292], 2012 FCA 214 supra

The taxpayer acquired a 100% undivided interest in a property (the "Quarter Claim") adjoining its "Golden Giant" mine subject to a 50% net profits royalty in favour of the vendor ("Teck/Corona"). In finding that the payment by the taxpayer of 50% of the net profits from the mining operations it conducted on the Quarter Claim did not entail a "reimbursement" by Teck/Corona for 50% of the mining taxes that the taxpayer paid as an expense of that operation, D'Arcy J. stated (at para. 77):

The allocation of revenue from the Golden Giant Mine to the calculation of the Quarter Claim Royalty was not payment of an amount by Teck/Corona. [The taxpayer] as the owner of the Golden Giant Mine (including the Quarter Claim) realized all revenue from mining the Golden Giant Mine. This revenue was not the revenue of Teck/Corona. Teck/Corona was only entitled to receive an amount as a royalty. Further, such royalty was only payable if the Royalty Account showed a credit balance.

Words and Phrases
reimbursement

P-075R, 6 July 2004 "Allowances and Reimbursements"

In contrast [to an allowance], a reimbursememt is a payment made by one person to repay another person for amounts spent. An amount constitutes a reimbursement where the amount is fully accounted for by the person receiving the payment (i.e., evidenced by supporting vouchers or records).

Words and Phrases
reimbursement allowance