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UpperDeck

Employee Travel a Taxable Benefit?

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Just read the Globe story that the CRA has decided that retail employee discounts not available to the general public are a " taxable benefit" to be added to income.

Hard-pressed to distinguish a reduced price on a pair of jeans ( retail workers) from a 50% meal for restaurant employees from a standby "J" pass. 

However, the submission of Air Canada is that the passes are a " gift" and not a right. I would think that retailers would say the same.

Hope that prevails.....an award pass from MIA to SYD return has a value I'd hate to have added to income to be taxed!!

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Gift not a right but didn't some unions get some pass wording in the contracts?  If so would that not be considered to be part of their income?

In the pass we were always told not to negotiate pass travel into our collective agreement as that would open the doors for it being taxed.  

Same as would employee parking, is that now taxed?

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47 minutes ago, Malcolm said:

Gift not a right but didn't some unions get some pass wording in the contracts?  If so would that not be considered to be part of their income?

Yes but that "gift" was in return for "gift concessions" that were returned to the company by said unions :cool:

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What's the value of a ticket that only exists if the seat was empty? It is awarded to the employee at the point just before flight close that the value has dropped to zero, as demand was so low that it could not be sold at any price.

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Airlines have said in the past, in response to taxing pass travel, that if that empty seat has a taxable value they should be able to write it off as a loss when it goes empty.

 

 

 

 

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Way back when, before the tax man was looking at taxing, a limited number of passes were free.  Then the feds said we should tax that and that is when the user fee first came in .  That worked at the time and the tax man backed off. 

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As far as I know, parking is taxed now Malcolm.

As far as passes go, like everything else they deem to be 'earned', governments always finds a way to place their dirty hand in the pockets of productive people and diminish the value of personal effort.

You work and they eat.

  

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Gov't of Canada targeting retail workers with employee discount tax
  
A new firestorm erupted in Ottawa over a new tax reform that may tax employee discounts. Kevin Gallagher reports.
  
Retail Council of Canada's Karl Littler says it is a bit of a mystery why they CRA changed their stance on taxing employee discounts. 


 CTVNews.ca Staff 
 Published Monday, October 9, 2017 10:00PM EDT  

Some Conservative MPs and business lobby groups are accusing the Liberal government of targeting low-wage earners with new rules around taxation of employee discounts.

The latest version of the Canada Revenue Agency’s tax folio advises employers that “when an employee receives a discount on merchandise because of their employment, the value of the discount is generally included in the employee’s income,” with the value of the discount assessed at “equal to the fair market value of the merchandise purchased, less the amount paid by the employee,” unless the discount is “available to the public or a segment of the public, at some point during the year.”

Conservative finance critic Pierre Poilievre issued a statement Monday saying the change means the government plans to tax things like a 10 per cent shoe discount offered to shoe salesmen, a meal discount offered to a waitress or a free gym membership given to a fitness trainer.

Before the change, which some expect to come into effect Jan. 1, employers were advised to tax employee discounts only if the employee was purchasing the merchandise below the employer’s cost.

Not only would the change “target those who can least afford to pay more,” according to Poilievre, but it means local business owners will have the headache of needing to “track all of these discounts.”

Conservative Senator Denise Batters posted on Facebook Monday that she sees the change as “yet another Trudeau government attack on the middle class ‘and those working hard to join it.’”

Conservative Deputy Leader Lisa Raitt, meanwhile, accused the Liberals of “picking the pocket of minimum wage earners.”

Karl Littler of the Retail Council of Canada called the move a “silly decision,” and said that he’s hopeful the government will “back off from this.”

“I don’t have a sense that the government is completely committed to this,” Littler added. “I have to think cooler heads will prevail.”

Aaron Wudrick of the Canadian Taxpayers Federation said that “on the surface, it looks like a triumph of bureaucratic pettiness over common sense.”

“These are very simple benefits for a lot of people of limited means,” Wudrick added.

Minister of National Revenue Diane Lebouthillier said in a written statement that the CRA’s goal is “to ensure that the agency does not impose additional administrative burdens on businesses.”
 

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Revenue minister reviewing proposal to tax employee discounts

 
CTV's Michel Boyer reports on the CRA targeting employee discounts saying the reaction has been fierce from the opposition's Lisa Raitt.
 
 
A new firestorm erupted in Ottawa over a new tax reform that may tax employee discounts. Kevin Gallagher reports.
Retail Council of Canada's Karl Littler says it is a bit of a mystery why they CRA changed their stance on taxing employee discounts.
CTVNews.ca Staff
Published Tuesday, October 10, 2017 12:16PM EDT

The federal government says it’s reviewing a proposal to tax employee discounts as income based on the amount of money saved.

A spokesperson for Revenue Minister Diane Lebouthillier confirmed that her office is reviewing the proposal, which appears in the latest version of the tax folio from the Canada Revenue Agency.

“There have been no changes to the laws governing taxable benefits to retail employees,” Lebouthillier is quoted as saying in the statement. “I’m committed to ensuring that the Canada Revenue Agency better work with stakeholders when reviewing its interpretations of the Income Tax Act.”

 

Retail workers may be forced to pay tax on employee discounts under a proposed change.

Lebouthilier added that the goal of her office is to ensure it does not “impose additional administrative burdens on businesses.”

The proposed measure sparked a firestorm of criticism on Monday from Conservative critics and business leaders. Under the proposed change, employee discounts would be counted as income, and the value of that discount would need to be taxed at “equal to the fair market value of the merchandise purchased, less the amount paid by the employee.” Exceptions would only be made on discounts that are afforded to some members of the public at some point during the year.

Conservative finance critic Pierre Poilievre was among those who loudly condemned the proposal, accusing the Liberals of targeting “those who can least afford to pay more.”

Conservative Deputy Leader Lisa Raitt said the move would amount to “picking the pocket of minimum wage earners.”

Aaron Wudrick of the Canadian Taxpayers Federation called the proposal “a triumph of bureaucratic pettiness over common sense.”

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25 minutes ago, runaway said:

Next it will be the Drug/Health and Dental plans that fall under taxable benefits!:angry:

Never, they will instead tax any free crew meals you get on long haul flights :D

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1 hour ago, Malcolm said:

Never, they will instead tax any free crew meals you get on long haul flights :D

Whether the crew member eats them ot not.

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30 minutes ago, dagger said:

The government is killing this CRA initiative, was never approved by the Minister who was unaware of its existence

 

Only another Liberal would believe that.

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2 hours ago, Fido said:

Only another Liberal would believe that.

Oh really? Did you know that the CRA decision to treat employee parking passes was not approved by the minister either. Different government though so we'll just ignore it. 

Edited by J.O.

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9 minutes ago, J.O. said:

Oh really? Did you know that the CRA decision to treat employee parking passes was not approved by the minister either. Different government though so we'll just ignore it. 

Amazing, if true, that our current Government is not aware of what is happening in areas under their control or should I just say "Shamefull". 

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I still appeal the parking thing every year.

 

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My take is that the Liberals asked CRA to try and float this taxable benefit increase and see what the response would be. Alas, it didn't go over well so the Liberals blame CRA for marking a stupid attempt at a tax increase.

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There was no attempt to vary the law; rather it was the interpretation of existing statute by some functionary. The difficulty is.....was the interpretation of that mid-level " expert" correct? One may object to the practical consequence but in that event, it is the statute that should be amended.

The CRA made a ruling on the definition of "active business" ( disallowing a deduction). That ruling was upheld by the Tax Court but over-ruled by the Federal Court.

In short the CRA can ASSERT a position; it does not mean it's right.

And I agree that the provision of a "first come; first served" parking facility should not be treated as a taxable benefit.

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And.....what about free travel ( including airfare in the class to which they are entitled) not only for the member but also for a " designated person" ( not a spouse). Not for commuting, however.

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