Principal Issues: Whether information returns T1204 and T1204 Summary should be filed in a given situation.
Position: No. In the given situation, the person making the payments is not a "federal body" as defined in subsection 237(1) of the Regulations. However, pursuant to subsection 200(1) of the Regulations, every person who makes a payment described in subsection 153(1) of the Act shall make an information return in prescribed form (T4A slips and T4A Summary) in respect of the payment, unless an information return in respect of the payment has been made under sections 202, 214, 237 or 238 of the Regulations. Fees, commissions or other amounts for services are the type of payments described in paragraph 153(1)(g) of the Act. There is a requirement to file an information return under subsection 200(1) of the Regulations notwithstanding the fact that no withholding of tax is required.
Reasons: Wording of the Act and previous positions.
2005-015480
XXXXXXXXXX S. Prud'Homme
(613) 957-8975
November 15, 2005
Dear Sir,
Subject: Request for Technical Interpretation - Application of subsection 237(2) of the Income Tax Regulations
This is in response to your fax of October 18, 2005, in which you requested our opinion regarding the potential application of subsection 237(2) of the Income Tax Regulations (the "Regulations") in a particular situation.
1) Your Question
We understand that during the course of a year, various persons render services to XXXXXXXXXX and that XXXXXXXXXX makes payments for those services (the "Contractual Payments").
We also understand that Quebec tax laws and regulations require XXXXXXXXXX to file an information return in respect of those Contractual Payments.
You wish to know whether, in respect of these Contractual Payments, XXXXXXXXXX is required to file a prescribed form return (the T1204 slips and the corresponding T1204 Summary) under subsection 237(2) of the Regulations.
2) Our Comments
Subsection 237(2) of the Regulations provides that a federal body that pays or credits an amount to a payee shall file an information return in prescribed form (T1204) in respect of the amount on or before March 31 in each year in respect of the preceding calendar year.
Subsection 237(1) of the Regulations defines "federal body" as a department or a Crown corporation, within the meaning of section 2 of the Financial Administration Act.
XXXXXXXXXX is not a "federal body" as defined in subsection 237(1) of the Regulations. Consequently, XXXXXXXXXX is not technically required to file a T1204 return under subsection 237(2) of the Regulations.
However, subsection 200(1) of the Regulations provides that every person who makes a payment described in subsection 153(1) of the Income Tax Act (the "Act") must make an information return in prescribed form (T4A slips and the corresponding T4A Summary) in respect of any such payment, unless such a return has been made under sections 202, 214, 237 or 238 of the Regulations. In that respect, Contractual Payments would be payments falling within paragraph 153(1)(g) of the Act. It should be noted that the obligation to file an information return in such circumstances exists even though there is no provision in the Act or the Regulations requiring a deduction or withholding of tax in respect of the Contractual Payments.
We hope that our comments are of assistance.
Best regards,
Stéphane Prud'Homme, Notary, M.Fisc.
For the Director
Corporate Reorganizations and Resource Industries Division
Income Tax Rulings Directorate
Directorate General for Policy and Planning