Subsection 100(1)
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.
Administrative Policy
24 September 2015 T.I. 2013-0495611E5 - Withholding on incentive payments to non-residents
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…)… .
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.