Regulation 200 - Remuneration and Benefits

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.

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.

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 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.

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.

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).

Discussion of Requirements to Issue T4As for Services Rendered

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

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).

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.