Subsection 153(1) - Withholding
Paragraph 153(1)(a)
Cases
The Queen v. Roll, 2001 DTC 5055, Docket: A-679-99 (FCA)
Given that he had made payments of remuneration to employees as a bare trustee for the corporation and the taxpayer, who was an employee of a corporation in financial difficulty, was persuaded by the president to receive deposits of the net payroll obligations of the corporation to his own bank account and to then disburse those amounts to the employees and that the decision to make payments of the net salaries of the employees was that of the principals of the corporation alone, it followed that the taxpayer was not within the scope of s. 153(1), 153(1.3) or 227(5).
Cana Construction Co. Ltd. v. The Queen, 96 DTC 6370 (FCA)
The Court found no manifest error in the Tax Court's finding that the appellant had undertaken to pay employees of its subcontractor and withhold and remit applicable source deductions including income tax.
Mollenhauer Ltd. v. The Queen, 92 DTC 6398 (FCTD)
When a subcontractor of the plaintiff ("Aprok") was unable to meet its payroll, Aprok arranged with the plaintiff, which was indebted to Aprok, to pay the net amounts owing to Aprok's employees. The plaintiff paid their salaries but made no source deductions. The Minister assessed the plaintiff under ss. 227(8) and (9) for failure to withhold and remit source deductions as required by s. 153(1).
In rejecting the plaintiff's submission that there was never any employee/employer relationship and the payments were not made by it as wages, and in holding that an employee does not have to be performing services as an employer of the payer in order to trigger the payer's obligation to withhold, Teitelbaum J. stated (at p. 6401):
"It is very clear that s. 153(1) of the Act does not speak of whether persons doing the paying are employers or not. I am satisfied that if a person or company is paying 'salary or wages or other remuneration' it must deduct or withhold the required amount pursuant to the Income Tax Act."
The Queen v. Coopers & Lybrand Ltd., 80 DTC 6281, [1980] CTC 367 (FCA)
The payment by a privately-appointed receiver-manager of the unpaid wages of the employees of the debtor company (1) was the payment of "salary or wages" (as opposed to "gratuitous benefactions made in order to earn and preserve the good-will of the persons who had been employees of" the debtor company, as was contended by the receiver-manager) and (2) was made by the receiver-manager on its own decision, and not by the debtor company (notwithstanding that the debenture stated that the "receiver shall for all purposes be deemed to be the agent of the Company".)
Dauphin Plains Credit Union Ltd. v. The Queen, 80 DTC 6123, [1980] CTC 247, [1980] 1 S.C.R. 1182
A receiver-manager of a company who pays unpaid wages to the company's employees comes within the words "every person paying salary or wages."
R. v. O'Dare, 79 DTC 5243, [1979] CTC 409 (B.C. Co. Ct.)
"[I]f Section 153 does not explicitly impress monies deducted pursuant to it with a trust, it does so by necessary implication."
See Also
Marshall v. The Queen, 2012 DTC 1068 [at 2815], 2012 TCC 21
The taxpayer was the sole shareholder and director of Internorth Limited ("IL") and a majority shareholder and director of Internorth Construction Company ("ICC"). ICC ran a construction business, and IL was incorporated to manage ICC. The minister assessed the taxpayer for unremitted source deductions in respect of salaries and wages paid to ICC employees. However, the taxpayer was able to establish that IL was only paying those amounts as an agent of ICC, and in fact IL had no employees at all. Because the taxpayer was assessed only in his capacity as a director of IL, and the obligation to remit source deductions lay with ICC, the taxpayer's appeal was granted.
Webb J. also specifically noted (at para. 25) that a director in a director's liability case is able to challenge the correctness of the assessment giving rise to the liability in issue.
Central Springs Limited v. The Queen, 2010 DTC 1258 [at 4409], 2010 TCC 543
The taxpayer and Humbly Enterprises were related corporations. When Humbly was experiencing financial difficulties and was in arrears for source deduction remittances, the taxpayer commenced paying the remuneration of Humbly's employees and took on their services. It was only at that point, Boyle J. found, that the individuals in question became employees of the taxpayer. Therefore, the taxpayer could not be liable for Humbly's source deduction arrears - Boyle J. characterized CRA's contrary position as "inappropriate retroactive collection planning." Absent a sham, the CRA has no right to redetermine a legal employment relationship.
Marché Lambert et Frères Inc. v. The Queen, 2008 DTC 3815, 2007 TCC 466
In response to a submission of the taxpayer that the taxpayer's payroll service provider ("Paie Maître"), and not the taxpayer itself, was liable for failure to remit source deductions, Paris J. stated (at para. 18) that "the relevant case law of the Federal Court of Appeal shows that a person is only liable under that subsection [s.153(1)] if it had decision-making powers over the payments to employees" and went on to find that here, Paie Maître was at all times subject to the instructions of the taxpayer and an affiliated company. He stated (at para. 40):
"It does not matter whether the contractual relationship between the Appellant and Paie Maître was a mandate or a trust, what matters is the control of the Appellant maintained over the funds that were in the hands of Paie Maître."
The taxpayer was found to have paid wages to its employees within the meaning of s. 153(1), with the result that it was liable under s. 227(9.4) to pay the amounts withheld from the wages but not remitted to the Receiver General.
Suspended Power Lift Service Inc. v. The Queen, 2007 DTC 1505, 2007 TCC 519
Webb J. found that where an amount has been deducted from compensation as income tax source deductions or employee premiums under the Canada Pension Plan Act, that amount must be remitted by the person so withholding from the compensation even if, in fact, the compensation was earned by someone who properly characterized was an independent contractor rather than an employee.
McLeod Masonry (1979) Ltd. v. The Queen, 2000 DTC 2238, Docket: 97-2566-IT-G (TCC)
Lamarre Proulx found (at p. 2243) that even if evidence, that a portion of the remuneration paid to employees of the taxpayer represented fraudulent overpayments attributable to overstatements of overtime, were accepted, this did not provide an excuse for the taxpayer to fail to remit amounts which it had shown as being deducted in respect of such alleged overpayment:
"Once the deduction has been made, it has to be withheld. It is trust money, it then has to be remitted to the Receiver General."
Manke v. The Queen, 98 DTC 1969 (TCC)
In finding that the taxpayer was entitled to credits for amounts allegedly withheld but not remitted, McArthur TCJ. stated (at p. 1974):
"It does not appear that the employer ever made an actual physical withholding of source deductions, however, all that the law requires is a failure to pay for wages on account of the withholding of source deductions, and not the actual placing of the money into someone's pockets."
The Queen v. Ursel Constructors Ltd., 96 DTC 1496 (TCC)
There was no evidence that any withholdings had been made by the corporate taxpayer to individual employees: no segregated payroll accounts were established for the individual showing paid deductions, no pay slips were provided to them and no cheque stubs were attached to their pay cheques. Accordingly, the individuals were not entitled to credit for source deductions in their individual returns.
Laxton v. MNR, 89 D.T.C. 629 (TCC)
The taxpayer were the director of a corporation (the "Corporation") which was the general partner of a limited partnership, and he also was a limited partner. In 1984, when the limited partnership business was not going well, the limited partners advance moneys with instructions that only the net wages of employees were to be paid. He was assessed under s. 227.1 following the bankruptcy of the limited partnership and the Corporation,
In rejecting a submission that it was not limited partnership and not the Corporation who was the payor of the wages of the limited partnership employees, so that the Corporation itself was not responsible for withholding, and so that the directors were not liable, Lamarre Proulx TCJ found that, as general partner, the Corporation had the powers and duties to manage, control, and administer and operate the business and affairs of the limited partnership and that "the Corporation did in effect carry on these managerial duties" (p. 632). Accordingly, the Corporation was the payor of the salaries and wages of the employees and was obligated by s. 153(1) to withhold and remit the source deductions. Furthermore, the provisions of s. 227.1(1) of applied to the directors so that (as the taxpayer did not submit a due diligence defence) he was liable.
Lalonde, 82 DTC 1772, [1982] CTC 2749 (T.R.B.)
The taxpayer's employer paid less than the full wages owing to the taxpayer after assuring him that the difference represented source deductions, but did not remit the source deductions to the Receiver General or issue a T4 to the taxpayer. Mr. Tremblay held that because under s. 153 the employer acted as agent of the Minister in withholding the appropriate tax at source, and as the Minister was responsible for his agent, the Minister could not require the taxpayer to pay tax already deducted by the Minister's agent.
Clark v. Oceanic Contractors Inc., [1982] BTC 417, [1983] 1 All E.R. 133 (HL)
nS.204(1) of the Income and Corporation Taxes Act 1970 stated baldly that "income tax shall ... be deducted or repaid by the person making payment" without (like s. 153(1) of the Canadian Act) stating explicitly that the payor, to be subject to this withholding obligation, must be a resident of or carrying on business in the jurisdiction. An argument was rejected that this provision, regarding collection of tax by deduction from wages, could never have been intended to apply to a foreign company, non-resident in the United Kingdom, which made payments outside the United Kingdom. It was sufficient that the payor carried on a trade in the United Kingdom to make it subject to the provision.
Administrative Policy
4 December 2014 Memorandum 2014-0531251I7 - Directors' Liability
A limited partnership, which shortly will be declared bankrupt, failed to remit source deductions. Would the general partner, which is a corporation, be liable for the unremitted source deductions?
After discussing Laxton, the Directorate stated:
[T]he corporation, as the general partner, has the power to manage, control, administer and operate the business and affairs of the limited partnership. Accordingly… the corporation is the payor of the amount and must meet the requirements of subsection 153(1)… .
See summary under s. 227.1(1).
6 November 2014 T.I. 2014-0530991E5 - Liability for the failure to withhold
A corporation failed to withhold the required amounts based on taxable benefits received by Canadian employees. Is it or its directors liable for the amount that should have been withheld? What if it instead is an unincorporated association? CRA responded:
…The payor is not required to pay the amount of income tax that should have been withheld provided that the employee is resident in Canada. However, where the particular employee is a non-resident of Canada…subsection 227(8.4) provides that the employer is liable for the whole amount that should have been deducted or withheld, along with any penalties and interest.
… [W]here the payor failed to remit amounts withheld or deducted, the payor…is liable for the amount of the deductions that were not remitted together with the penalty for not remitting, and interest thereon.
…[W]here the corporation failed to make the required withholding of tax with respect to an employee who is a resident of Canada, the corporation and its directors…are liable only to penalties [under ss. 227(8) and 227(8.3)] and interest… .
[W]here an association has failed to deduct or withhold an amount[,] or deducted, but failed to remit the amounts, the members of the association who have the power to provide overall management of the association may be liable for the tax, along with any penalties and interest as described above.
2 October 2014 T.I. 2013-0508651E5 - Services provided by non-residents
Is a taxpayer (CanCo), who hires a USCo to provide services and equipment in Canada of its employees in Canada, liable for source deductions for the remuneration paid to the employees of USCo? CRA stated:
[I]in some situations, such as the one that you describe, it may not be clear who is the payer of the remuneration. These situations, where an employee is temporarily assigned from an entity in one country to an entity in another country, are addressed in paragraphs 35 to 39 of the Information Circular [IC-75-6R2].
Where the facts indicate that an employer/employee relationship exists between CanCo and the Employees, CanCo could be considered to be the Payer, even if the Employees remain on the payroll of USCo. …
26 September 2014 T.I. 2014-0531441E5 - Unfunded LTD plan payment to non-resident employee
A Canadian resident employee, after qualifying for benefits under the unfunded long term disability plan ("LTD Plan") of the Canadian resident employer, becomes a resident of the U.S. Under the terms of the Plan, the employee is not required to fulfill any duties of employment and will continue to receive benefits until the earlier of rehabilitation and commencement of benefits under the employer pension plan. Would Part XIII withholding apply? CRA stated:
[T]he LTD Plan payments would be salary, wages or other remuneration…because they would be amounts arising out of the employment relationship. … As such, the amount of LTD Plan payments that would be taxable as income earned by a non-resident employee would be determined in accordance with subsection 115(2) and withholdings under Part XIII would not be applicable… [and] the LTD Plan payments would be subject to withholding under paragraph 153(1)(a)… .
CRA went on to note that as Art. XVIII, para. 3 of the Canada-U.S. Convention defines "pensions" to include any payment under a disability plan "a U.S. resident employee receiving LTD Plan payments could file a Canadian income tax return in order to obtain a refund of any withholdings made in excess of the 15% amount specified in paragraph 2 of Article XVIII."
20 December 2013 T.I. 2013-0505471E5 - Director's Fees
Were fees received by members of a council of a professional college, who also had professional corporations, subject to withholding? Before indicating that "unless the individual receiving the fees is doing so on behalf of the corporation and not in a personal capacity, the payor is required to withhold and remit income tax and report the amounts on a T4 slip," CRA indicated that the individuals were able to serve because they "are registered to practice the profession" and "are usually elected or otherwise appointed to council… by the professional association." Accordingly, each individual received the "fees in his or her capacity as an individual," so that their fees were subject to withholding.
14 November 2013 T.I. 2013-0500641E5 - Subsections 7(6) and 153(1) - Withholding
Under an arrangement described in s. 7(6), does obligation to withhold tax rests with the corporation/employer or the s. 7(6) trust? CRA stated:
[T]he arrangement is deemed to be a section 7 agreement to issue shares. Accordingly…the corporation is paying the section 7 employment benefit as remuneration for purposes of paragraph 153(1)(a) and therefore, the corporation has the obligation to withhold and remit the appropriate amount of tax.
6 July 2012 Memorandum 2012-0440741I7 - stock option benefit derived by US resident
USCo, which is a qualifying person for purposes of the Canada-US Income Tax Convention and is a wholly-owned subsidiary of a Canadian public company, employed a US-resident individual who performed employment duties for USCo in Canada for 55, 100 and 75 days in 2009, 2010 and 2011, respectively. On January 1, 2009, the US employee was granted stock options by Canco in consideration for his duties of employment performed for USCo and, following the exercise of the options on December 31, 2010, USCo paid Canco a sum equal to the in-the-money value of the options at the time of such exercise ($20,000).
After noting that the stock option benefit would be exempt from Canadian tax under the exemption in para. 2 of Article XV of the Canada-US Convention, CRA asserted that this did not relieve USCo of its source deduction obligations:
The corporation that has agreed to sell or issue the shares to the employee (in this case, Canco) will be considered to be the "payer" of the stock option benefit for purposes of paragraph 153(1)(a) (and will be responsible for the normal withholding), unless it receives reimbursement, in whole or in part, either directly or indirectly, in respect of the benefit. Since, in this case, Canco is reimbursed by USCo for the amount of the benefit conferred on the US Employee, it is our view that USCo is in substance making the actual payment and therefore is required to make the withholdings required under paragraph 153(1)(a) in respect of the remuneration paid to the US Employee for services rendered in Canada....Pursuant to subsection 153(1.1), ...CRA... may grant a waiver from withholding if a non-resident employee can provide evidence that the payments will be exempt from Canadian tax under the Treaty....[W]here the US Employee has not obtained a waiver..., USCo (as the employer) will be liable for the amount of tax that should have been withheld from the stock option benefit realized by the US Employee.... Where USCo has failed to withhold... such a failure would generally give rise to an assessment of a penalty and interest under subsections 227(8).. and 227(8.3)....
15 June 2011 Roundtable Q. , 2011-040550
The employer's withholding obligations apply even where the employee's only remuneration is in the form of benefits.
3 November 2010 Memorandum 2010-038356 -
A US-resident corporation which employs a Canadian-resident individual whose services are performed solely in the US nonetheless is required to withhold source deductions from the wages paid to the employee.
18 July 2007 T.I. 2007-024208
In response to a question as to whether a company resident in the U.S. is required to obtain a payroll number and withhold payroll deductions from the wages it pays to an employee who is a Canadian-resident and renders his services to the U.S. company partially in Canada and partially in the U.S., CRA stated that an employer is required to deduct withholdings at source from the salary it pays to an employee who is a resident of Canada, regardless of where the services are rendered, but went on to note that the individual may be able to obtain a "letter of authority" from CRA to authorize the U.S. employer to reduce the deductions at source to take into account any available foreign tax credit.
8 February 2005 Interpretation Case No. 52141
Where stock options issued to an independent contractor do not have an exercise price that is less than the fair market value of the shares at the time of the granting of the option, no additional consideration is considered to be received by the contractor for its services as a result of the granting of the options.
10 January 2001 T.I. 2000-0056135
The government of Canada retains a third party services provider (the "Agent") to provide relocation services to government employeees on its behalf, as well as payroll reporting compliance, and funds the Agent for all reimbursement or other payments made by the Agent to the relocated employees (some of which give rise to taxable benefits). CRA stated:
any taxable benefit conferred on a GOC employee by the Agent should be reported on a T4 slip. Such a benefit is in effect being conferred by the GOC on its employees through its Agent. For the same reason, the obligation to withhold and remit income tax (and other applicable withholdings) on the taxable relocation benefits on a timely basis would be with the GOC. However, the GOC may engage the Agent or any other agent to fulfil its withholding and reporting obligations.
28 May 1997 T.I. 971070
"Where the restaurant patron settles his bills with a major credit card and includes an amount as gratuity on the card or where the restaurant owner bills the patron for the cost of the food and beverage and includes 15% gratuity for the staff, the requirements of subsection 153(1) of the Act are met."
1995 Tax Executives Institute Round Table, Q. 5 (5M08860E)
No withholding is required on employer contributions to an EPSP and on distributions from an EPSP to the employee.
1 September 1994 T.I. 5-942025
No withholding is required where an employer makes a contribution to an employee profit sharing plan.
28 April 1993 Memorandum 931202
Where an employee who is laid off but wants to retain rights to be recalled requests that amounts that otherwise would be paid to him as severance pay and/or termination pay be held by the Director of the Employment Standards Branch, no withholding should be made by the employer with respect to those payments. However, when amounts are paid by the Employment Standards Branch to the employee, RC would expect that the applicable withholdings would be made at that time by the Branch.
4 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2425)
Payments made by an employer to an employee profit sharing plan as defined in s. 144(1) are "salary or wages or other remuneration" and, therefore, are subject to withholding.
28 January 1993 T.I. (Tax Window, No. 28, p. 9, ¶2403)
A Canadian-resident loan-out corporation will be required to make deductions at source on any salaries paid to the artist-employee even though the salary pertains to services rendered outside of Canada that may be taxable in the country where the services are rendered.
3 October 1991 T.I. (Tax Window, No. 10, p. 23, ¶1494)
S.153(1)(a) refers to every person who has employees in Canada irrespective whether the person carries on business in Canada.
Paragraph 153(1)(c)
Administrative Policy
30 November 1991 Round Table (4M0462), Q. 12.1 - Payment of Certain Amounts into an R.R.S.P. (C.T.O. September 1994)
"No source deduction is required to be made on amounts received by a taxpayer in a court judgment for unfair dismissal that are identified as interest accrued before the date of the court's decision".
80 C.R. - Q.10
Where an employer makes a payment into court which the employee may or may not accept, the employer is responsible for withholding.
If an amount is awarded by the court to compensate the employee for not having received the termination payment at an earlier time, that amount is subject to withholding.
Paragraph 153(1)(g)
Administrative Policy
30 October 2012 Ontario CTF Roundtable Q. 10, 2012-0462961C6
After stating that an estate would be required to issue a T4A to an executor who was earning his fees as business income rather than income from an office, CRA referred to its policy not to require a T4A for payments less than $500, and then further stated:
Also, as noted on page 16 of the T4A guide (RC4157), "Until such time as the CRA undertakes a review for the purposes of clarifying the types of fees for services that are to be reported on the T4A slip, taxpayers will not be penalized for failing to complete Box 048 on the T4A slip."
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.
RC4157 Rev. 12 "Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary"
Box 048 - Fees for services
Enter any fees or other amounts paid for services. Do not include GST/HST paid to the recipient for these services.
Note: Until we identify the types of fees for services that are to be reported on the T4A slip, taxpayers will not be penalized for failing to complete box 048.
Forms
Subsection 153(1.1) - Undue hardship
Administrative Policy
15 June 2011 Roundtable Q. , 2011-040550
Following the introduction of s. 153(1.31), the employer's withholding obligations respecting stock option benefits will apply even where the employee's only remuneration in the taxation year is in the form of such benefits.
Income Tax Technical News, No. 41, 23 December 2009 Under "Stock Benefit Withholding Requirements"
6 July 1995 T.I. 951260 (C.T.O. "LSVCC and Tax Credit in RRSP")
"If satisfactory documentation exists to confirm entitlement, virtually any credit or deduction may form the basis for a request for a reduction of source deductions."
1994 A.P.F.F. Round Table, Q. 21
Where part of a retiring allowance paid to an employee some time subsequent to his discharge must be used to repay unemployment insurance benefits received by the employee subsequent to his discharge, the Department on application may set a level of withholding lower than that contemplated in the Regulations when it believes that deduction of the amount set out by the Regulations would unduly prejudice the recipient.
93 CPTJ - Q.9
RC recognizes that requiring withholding from the employee's cash remuneration on the basis of a substantial non-cash benefit can create hardship to the employee and encourages the employer to make withholdings from the remuneration to the extent possible without imposing hardship to the individual.
24 February 1992 Memorandum (Tax Window, No. 13, p. 22, ¶1613)
RC's general policy is to grant a waiver of withholding if reasonable evidence is provided that the total tax withheld at statutory rates will exceed tax payable for the year, provided all prior years' returns have been filed and all outstanding balances have been paid.
91 C.R. - Q.47
RC encourages employers to make withholdings from employees' cash remuneration to the extent possible, without imposing actual hardship, when an employee stock option has been exercised.
91 C.R. - Q.68
Re criteria for granting a waiver.
11 April 1991 T.I. (Tax Window, No. 2, p. 22, ¶1200)
RC will waive the requirement that tax be withheld from remuneration to non-resident employees if the exemption in ss.115(2)(e)(i)(A) or (B) is available.
88 C.R. - Q.74
While it is not RC's policy to insist on withholding when non-cash benefits are the only income of the employee from the employer, it is expected that withholding will be made where it is possible to do so.
88 C.R. - Q.75
If a non-commission employee is required to travel by his employer and receives a travel allowance, and wishes relief in respect of allowable deductions, RC will normally issue an income tax waiver if the employee can demonstrate that the deductions were previously allowed when filing his tax return.
Articles
Anu Nijhawan, "Source Withholdings: Non Resident Employees 'Visiting' Canada", Taxation of Executive Compensation and Retirement, Vol. 15, No. 9, May 2004, p. 412.
Subsection 153(1.3) - Split-pension amount
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.
In finding that s. 153(1.3) resulted in joint liability for the appellant and the banks (the ("mandators") Tremblay TCJ. stated (pp. 1644-1645):
"I am of the opinion that the appellant, a trustee within the meaning of subsection 153(1.3), is deemed to be the person making the payment and that accordingly the trustee and this other person (the mandators) are jointly and severally liable for the amount which subsection (1) states must be deducted or withheld and the remittance to be made on the payment."
It also was noted that the assets of the business exceeded the gross amount of the remuneration in question.
Plaskett & Associates Ltd. v. MNR, 91 DTC 162 (TCC)
Sobier TCJ. accepted a submission that an interim receiver was acting only as a watchman or conservator, and could not make business decisions. Accordingly, the interim receiver was not a "trustee" as defined in s. 153(1.3).
Subsection 153(1.4) - Exception — remittance to designated financial institution
Cases
CIBC v. The Queen, 95 DTC 5367 (FCTD)
Although an individual "monitor", which the CIBC appointed to spend substantial time at the saw mill operations of a corporation that had begun to suffer severe losses, became an integral and influential part of the senior management team of the corporation and participated in all significant management meetings and decisions, he was neither absolutely nor substantially controlling the corporation's operations. Accordingly, he was not a "trustee".
See Also
The Toronto-Dominion Bank v. The Queen, 94 DTC 1261 (TCC)
Following default by a corporation, ("Mark Creek") in the repayment of indebtedness to a Bank, the Bank commenced foreclosure proceedings and, approximately 3½ months later, the Supreme Court of British Columbia approved the sale of the secured asset (an inn and related property) to a third party that assumed possession and took over the operations. Sarchuk TCJ. indicated that if Mark Creek had been entitled during the 3½ month period to expect the Bank to act in its interest in and for the purposes of their respective relationship, a fiduciary obligation upon the Bank would have arisen which would have brought the Bank within the ambit of ss.153(1.3) and (1.4), provided that the Bank was "controlling or otherwise dealing with the property, business ..." of Mark Creek and "authorized or caused a payment" referred to in s. 153(1). However, a review of the circumstances indicated that the Bank did not have substantial control over the affairs of Mark Creek, with the result that it was not liable for a failure of Mark Creek to withhold and remit source deductions during the 3½ month period.
Subsection 153(1.01) - Withholding — stock option benefits
Articles
Barbara Worndl, Ron Choudhury, "New Stock Option Benefit Withholding Provisions - a Critical Look", Taxation of Executive Compensation and Retirement, 2011, p. 1386.
Subsection 153(3) - Deemed effect of deduction
Cases
Attorney-General of Canada v. Fraser, 97 DTC 5292 (FCA)
While the taxpayer was off work from an injury, his employer continued to pay him his full net salary and remitted source deductions based on the taxpayer's previous salary. These remittances were deemed by s. 153(3) to have been received by the taxpayer. Accordingly, it was not open to the Minister to later accept the employer's position that it had over remitted source deductions and reimbursed a portion of those amounts to the employer.
Subsection 153(4) - Unclaimed dividends, interest and proceeds
Administrative Policy
5 July 1996 Headquarters Letter File No. 11690-9
Discussion of four examples respecting the acquisition by a bookstore of used books.
7 September 1994 T.I. 941554 (C.T.O. "Unclaimed Interest & Dividends")
The reference to a "taxation year" and "year" in the preamble to s. 153(4) refers to the taxation year of the broker/security dealer and not to that of the unidentified individual (namely, a calendar year).
10 May 1990 T.I. (October 1990 Access Letter, ¶1480)
The postamble to s. 153(4) does not permit a taxpayer to elect to include the unpaid amount in his income.
88 C.R. - Q.58
S.153(4) will not apply to an issuing corporation in respect of amounts that it has not paid.