Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
XXXXXXXXXX wanting employer-provided or employer-subsidized transit passes a tax exempt employment
Position:
would require an amendment to ITA
Reasons:
6(1)(a)
March 13, 1998
XXXXXXXXXX
Dear XXXXXXXXXX:
XXXXXXXXXX
The Income Tax Act taxes the value of all benefits received or enjoyed by taxpayers in the course of their office or employment, including the benefit derived from the employer purchase, provision or subsidization of employees' transit passes and the benefit enjoyed from employer-provided parking. A transit pass given to an employee is usually for travel between the employee's home and work. Such travel is personal in nature and, therefore, if an employer chose to assume these personal costs by providing transit passes, the benefit would be taxed. The benefit from employer-provided parking is similarly taxed except where the parking is provided for business purposes; that is, no benefit exists when the parking is provided because the employee is required to use an automobile on a regular basis in carrying out employment duties.
An amendment to the Act would be necessary in order to make employer-provided, or employer-subsidized, transit passes a tax exempt employment benefit. As such amendments are the responsibility of the Honourable Paul Martin, Minister of Finance, it is appropriate that you also sent him a copy of your recommendations.
I trust these comments are of assistance to you.
Yours sincerely,
Herb Dhaliwal, P.C., M.P.
Sandra Short
957-2136
December 22, 1997