Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Short Title

Marginal note:Short Title

1 This Act may be cited as the Income Tax Act.

PART IIncome Tax

DIVISION ALiability for Tax

Marginal note:Tax payable by persons resident in Canada

• 2 (1) An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year.

• Marginal note:Taxable income

  (2) The taxable income of a taxpayer for a taxation year is the taxpayer’s income for the year plus the additions and minus the deductions permitted by Division C.

• Marginal note:Tax payable by non-resident persons

  (3) Where a person who is not taxable under subsection 2(1) for a taxation year

  • (a) was employed in Canada,

  • (b) carried on a business in Canada, or

  • (c) disposed of a taxable Canadian property,

  at any time in the year or a previous year, an income tax shall be paid, as required by this Act, on the person’s taxable income earned in Canada for the year determined in accordance with Division D.

DIVISION BComputation of Income

Basic Rules

Marginal note:Income for taxation year

3 The income of a taxpayer for a taxation year for the purposes of this Part is the taxpayer’s income for the year determined by the following rules:

• (a) determine the total of all amounts each of which is the taxpayer’s income for the year (other than a taxable capital gain from the disposition of a property) from a source inside or outside Canada, including, without restricting the generality of the foregoing, the taxpayer’s income for the year from each office, employment, business and property,

• (b) determine the amount, if any, by which

  • (i) the total of

    • (A) all of the taxpayer’s taxable capital gains for the year from dispositions of property other than listed personal property, and

    • (B) the taxpayer’s taxable net gain for the year from dispositions of listed personal property,

  exceeds

  • (ii) the amount, if any, by which the taxpayer’s allowable capital losses for the year from dispositions of property other than listed personal property exceed the taxpayer’s allowable business investment losses for the year,

• (c) determine the amount, if any, by which the total determined under paragraph (a) plus the amount determined under paragraph (b) exceeds the total of the deductions permitted by Subdivision E in computing the taxpayer’s income for the year (except to the extent that those deductions, if any, have been taken into account in determining the total referred to in paragraph (a), and

• (d) determine the amount, if any, by which the amount determined under paragraph (c) exceeds the total of all amounts each of which is the taxpayer’s loss for the year from an office, employment, business or property or the taxpayer’s allowable business investment loss for the year,

and for the purposes of this Part,

• (e) where an amount is determined under paragraph (d) for the year in respect of the taxpayer, the taxpayer’s income for the year is the amount so determined, and

• (f) in any other case, the taxpayer shall be deemed to have income for the year in an amount equal to zero.

Marginal note:Income or loss from a source or from sources in a place

• 4 (1) For the purposes of this Act,

  • (a) a taxpayer’s income or loss for a taxation year from an office, employment, business, property or other source, or from sources in a particular place, is the taxpayer’s income or loss, as the case may be, computed in accordance with this Act on the assumption that the taxpayer had during the taxation year no income or loss except from that source or no income or loss except from those sources, as the case may be, and was allowed no deductions in computing the taxpayer’s income for the taxation year except such deductions as may reasonably be regarded as wholly applicable to that source or to those sources, as the case may be, and except such part of any other deductions as may reasonably be regarded as applicable thereto; and

  • (b) where the business carried on by a taxpayer or the duties of the office or employment performed by a taxpayer was carried on or were performed, as the case may be, partly in one place and partly in another place, the taxpayer’s income or loss for the taxation year from the business carried on, or the duties performed, by the taxpayer in a particular place is the taxpayer’s income or loss, as the case may be, computed in accordance with this Act on the assumption that the taxpayer had during the taxation year no income or loss except from the part of the business that was carried on in that particular place or no income or loss except from the part of those duties that were performed in that particular place, as the case may be, and was allowed no deductions in computing the taxpayer’s income for the taxation year except such deductions as may reasonably be regarded as wholly applicable to that part of the business or to those duties, as the case may be, and except such part of any other deductions as may reasonably be regarded as applicable thereto.

• Marginal note:Idem

  (2) Subject to subsection 4(3), in applying subsection 4(1) for the purposes of this Part, no deductions permitted by sections 60 to 64 apply either wholly or in part to a particular source or to sources in a particular place.

• Marginal note:Deductions applicable

  (3) In applying subsection 4(1) for the purposes of subsections 104(22) and 104(22.1) and sections 115 and 126,

  • (a) subject to paragraph (b), all deductions permitted in computing a taxpayer’s income for a taxation year for the purposes of this Part, except any deduction permitted by any of paragraphs 60(b) to (o), (p), (r) and (v) to (z), apply either wholly or in part to a particular source or to sources in a particular place; and

  • (b) any deduction permitted by subsection 104(6) or 104(12) shall not apply either wholly or in part to a source in a country other than Canada.

• (4) [Repealed, 1996, c. 21, s. 2(1)]

SUBDIVISION AIncome or Loss from an Office or Employment

Basic Rules

Marginal note:Income from office or employment

• 5 (1) Subject to this Part, a taxpayer’s income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year.

• Marginal note:Loss from office or employment

  (2) A taxpayer’s loss for a taxation year from an office or employment is the amount of the taxpayer’s loss, if any, for the taxation year from that source computed by applying, with such modifications as the circumstances require, the provisions of this Act respecting the computation of income from that source.

Inclusions

Marginal note:Amounts to be included as income from office or employment

• 6 (1) There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable

  • Marginal note:Value of benefits

    (a) the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year in respect of, in the course of, or by virtue of the taxpayer’s office or employment, except any benefit

    • (i) derived from the contributions of the taxpayer’s employer to or under a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a pooled registered pension plan, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan,

    • (ii) under a retirement compensation arrangement, an employee benefit plan or an employee trust,

    • (iii) that was a benefit in respect of the use of an automobile,

    • (iv) derived from counselling services in respect of

      • (A) the mental or physical health of the taxpayer or an individual related to the taxpayer, other than a benefit attributable to an outlay or expense to which paragraph 18(1)(l) applies, or

      • (B) the re-employment or retirement of the taxpayer,

    • (v) under a salary deferral arrangement, except to the extent that the benefit is included under this paragraph because of subsection (11), or

    • (vi) that is received or enjoyed by an individual other than the taxpayer under a program provided by the taxpayer’s employer that is designed to assist individuals to further their education, if the taxpayer deals with the employer at arm’s length and it is reasonable to conclude that the benefit is not a substitute for salary, wages or other remuneration of the taxpayer;

  • Marginal note:Personal or living expenses

    (b) all amounts received by the taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except

    • (i) travel, personal or living expense allowances

      • (A) expressly fixed in an Act of Parliament, or

      • (B) paid under the authority of the Treasury Board to a person who was appointed or whose services were engaged pursuant to the Inquiries Act, in respect of the discharge of the person’s duties relating to the appointment or engagement,

    • (ii) travel and separation allowances received under service regulations as a member of the Canadian Forces,

    • (iii) representation or other special allowances received in respect of a period of absence from Canada as a person described in paragraph 250(1)(b), (c), (d) or (d.1),

    • (iv) representation or other special allowances received by a person who is an agent-general of a province in respect of a period while the person was in Ottawa as the agent-general of the province,

    • (v) reasonable allowances for travel expenses received by an employee from the employee’s employer in respect of a period when the employee was employed in connection with the selling of property or negotiating of contracts for the employee’s employer,

    • (v.1) allowances for board and lodging of the taxpayer, to a maximum total of $300 for each month of the year, if

      • (A) the taxpayer is, in that month, a registered participant with, or member of, a sports team or recreation program of the employer in respect of which membership or participation is restricted to persons under 21 years of age,

      • (B) the allowance is in respect of the taxpayer’s participation or membership and is not attributable to services of the taxpayer as a coach, instructor trainer, referee, administrator or other similar occupation,

      • (C) the employer is a registered charity or a non-profit organization described in paragraph 149(1)(l), and

      • (D) the allowance is reasonably attributable to the cost to the taxpayer of living away from the place where the employee would, but for the employment, ordinarily reside,

    • (vi) reasonable allowances received by a minister or clergyman in charge of or ministering to a diocese, parish or congregation for expenses for transportation incident to the discharge of the duties of that office or employment,

    • (vii) reasonable allowances for travel expenses (other than allowances for the use of a motor vehicle) received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling away from

      • (A) the municipality where the employer’s establishment at which the employee ordinarily worked or to which the employee ordinarily reported was located, and

      • (B) the metropolitan area, if there is one, where that establishment was located,

      in the performance of the duties of the employee’s office or employment,

    • (vii.1) reasonable allowances for the use of a motor vehicle received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling in the performance of the duties of the office or employment,

    • (viii) [Repealed, 1999, c. 22, s. 2]

    • (ix) allowances (not in excess of reasonable amounts) received by an employee from the employee’s employer in respect of any child of the employee living away from the employee’s domestic establishment in the place where the employee is required by reason of the employee’s employment to live and in full-time attendance at a school in which the language primarily used for instruction is the official language of Canada primarily used by the employee if

      • (A) a school suitable for that child primarily using that language of instruction is not available in the place where the employee is so required to live, and

      • (B) the school the child attends primarily uses that language for instruction and is not farther from that place than the community nearest to that place in which there is such a school having suitable boarding facilities,

    and, for the purposes of subparagraphs (v), (vi) and (vii.1), an allowance received in a taxation year by a taxpayer for the use of a motor vehicle in connection with or in the course of the taxpayer’s office or employment shall be deemed not to be a reasonable allowance

    • (x) where the measurement of the use of the vehicle for the purpose of the allowance is not based solely on the number of kilometres for which the vehicle is used in connection with or in the course of the office or employment, or

    • (xi) where the taxpayer both receives an allowance in respect of that use and is reimbursed in whole or in part for expenses in respect of that use (except where the reimbursement is in respect of supplementary business insurance or toll or ferry charges and the amount of the allowance was determined without reference to those reimbursed expenses);

  • Marginal note:Director’s or other fees

    (c) director’s or other fees received by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment;

  • Marginal note:Allocations, etc., under profit sharing plan

    (d) amounts allocated to the taxpayer in the year by a trustee under an employees profit sharing plan as provided by section 144 except subsection 144(4), and amounts required by subsection 144(7) to be included in computing the taxpayer’s income for the year;

  • Marginal note:Standby charge for automobile

    (e) if at any time in the year an automobile is made available to the taxpayer, or to a particular person who does not deal at arm’s length with the taxpayer, by another person (referred to in this paragraph as “the employer”) because of or as a consequence of a previous, the current or an intended office or employment of the taxpayer, the amount, if any, by which

    • (i) an amount that is a reasonable standby charge for the automobile for the total number of days in the year during which it was made so available

    exceeds

    • (ii) the total of all amounts, each of which is an amount (other than an expense related to the operation of the automobile) paid in the year by the taxpayer, or the particular person who does not deal at arm’s length with the taxpayer, to the employer for the use of the automobile;

  • Marginal note:Group sickness or accident insurance plans

    (e.1) the total of all amounts contributed in the year in respect of the taxpayer by the taxpayer’s employer to a group sickness or accident insurance plan, except to the extent that the contributions are attributable to benefits under the plan that, if received by the taxpayer, would be included in the taxpayer’s income under paragraph (f) in the year the benefits are received if that paragraph were read without regard to its subparagraph (v);

  • Marginal note:Employment insurance benefits

    (f) the total of all amounts received by the taxpayer in the year that were payable to the taxpayer on a periodic basis in respect of the loss of all or any part of the taxpayer’s income from an office or employment, pursuant to

    • (i) a sickness or accident insurance plan,

    • (ii) a disability insurance plan,

    • (iii) an income maintenance insurance plan, or

    • (iii.1) a plan described in any of subparagraphs (i) to (iii) that is administered or provided by an employee life and health trust,

    to or under which the taxpayer’s employer has made a contribution, not exceeding the amount, if any, by which

    • (iv) the total of all such amounts received by the taxpayer pursuant to the plan before the end of the year and

      • (A) where there was a preceding taxation year ending after 1971 in which any such amount was, by virtue of this paragraph, included in computing the taxpayer’s income, after the last such year, and

      • (B) in any other case, after 1971,

    exceeds

    • (v) the total of the contributions made by the taxpayer under the plan before the end of the year and

      • (A) where there was a preceding taxation year described in clause (iv)(A), after the last such year, and

      • (B) in any other case, after 1967;

  • Marginal note:Canadian Forces members and veterans amounts

    (f.1) the total of all amounts received by the taxpayer in the year on account of

    • (i) an earnings loss benefit, an income replacement benefit (other than an amount determined under subsection 19.1(1), paragraph 23(1)(b) or subsection 26.1(1) of the Veterans Well-being Act, as modified, where applicable, under Part 5 of that Act), a supplementary retirement benefit or a career impact allowance payable to the taxpayer under Part 2 of the Veterans Well-being Act, or

    • (ii) an amount payable under any of subsections 99(6), 109(1) and 115(5) and sections 124 to 126 of the Veterans Well-being Act;

  • Marginal note:Employee benefit plan benefits

    (g) the total of all amounts each of which is an amount received by the taxpayer in the year out of or under an employee benefit plan or from the disposition of any interest in any such plan, other than the portion thereof that is

    • (i) a death benefit or an amount that would, but for the deduction provided in the definition of that term in subsection 248(1), be a death benefit,

    • (ii) a return of amounts contributed to the plan by the taxpayer or a deceased employee of whom the taxpayer is an heir or legal representative, to the extent that the amounts were not deducted in computing the taxable income of the taxpayer or the deceased employee for any taxation year,

    • (iii) a superannuation or pension benefit attributable to services rendered by a person in a period throughout which the person was not resident in Canada, or

    • (iv) a designated employee benefit (as defined in subsection 144.1(1));

  • Marginal note:Employee trust

    (h) amounts allocated to the taxpayer for the year by a trustee under an employee trust;

  • Marginal note:Salary deferral arrangement payments

    (i) the amount, if any, by which the total of all amounts received by any person as benefits (other than amounts received by or from a trust governed by a salary deferral arrangement) in the year out of or under a salary deferral arrangement in respect of the taxpayer exceeds the amount, if any, by which

    • (i) the total of all deferred amounts under the arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for preceding taxation years

    exceeds

    • (ii) the total of

      • (A) all deferred amounts received by any person in preceding taxation years out of or under the arrangement, and

      • (B) all deferred amounts under the arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years;

  • Marginal note:Reimbursements and awards

    (j) amounts received by the taxpayer in the year as an award or reimbursement in respect of an amount that would, if the taxpayer were entitled to no reimbursements or awards, be deductible under subsection 8(1) in computing the income of the taxpayer, except to the extent that the amounts so received

    • (i) are otherwise included in computing the income of the taxpayer for the year, or

    • (ii) are taken into account in computing the amount that is claimed under subsection 8(1) by the taxpayer for the year or a preceding taxation year;

  • Marginal note:Automobile operating expense benefit

    (k) where

    • (i) an amount is determined under subparagraph 6(1)(e)(i) in respect of an automobile in computing the taxpayer’s income for the year,

    • (ii) amounts related to the operation (otherwise than in connection with or in the course of the taxpayer’s office or employment) of the automobile for the period or periods in the year during which the automobile was made available to the taxpayer, or a person who does not deal at arm’s length with the taxpayer, are paid or payable by the employer within the meaning of paragraph (e) that made the automobile available (in this paragraph referred to as the “payor”), and

    • (iii) the total of the amounts so paid or payable is not paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer,

    the amount in respect of the operation of the automobile determined by the formula

    A - B

    where

    A

    is

    • (iv) where the automobile is used primarily in the performance of the duties of the taxpayer’s office or employment during the period or periods referred to in subparagraph (ii) and the taxpayer notifies the employer in writing before the end of the year of the taxpayer’s intention to have this subparagraph apply, 1/2 of the amount determined under subparagraph 6(1)(e)(i) in respect of the automobile in computing the taxpayer’s income for the year, and

    • (v) in any other case, the amount equal to the product obtained when the amount prescribed for the year is multiplied by the total number of kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the period or periods referred to in subparagraph 6(1)(k)(ii), and

    B

    is the total of all amounts in respect of the operation of the automobile in the year paid in the year or within 45 days after the end of the year to the payor by the taxpayer or by the person related to the taxpayer; and

  • Marginal note:Where standby charge does not apply

    (l) the value of a benefit in respect of the operation of an automobile (other than a benefit to which paragraph (k) applies or would apply but for subparagraph (k)(iii)) received or enjoyed by the taxpayer, or by a person related to the taxpayer, in the year in respect of, in the course of or because of, the taxpayer’s office or employment.

• Marginal note:Parking cost

  (1.1) For the purposes of this section, an amount or a benefit in respect of the use of a motor vehicle by a taxpayer does not include any amount or benefit related to the parking of the vehicle.

• Marginal note:Deeming rule — amount received

  (1.2) For the purposes of paragraph (1)(g), an amount received by an individual out of or under an employee benefit plan is deemed to have been received by a taxpayer and not by the individual if

  • (a) the individual does not deal at arm’s length with the taxpayer;

  • (b) the amount is received in respect of an office or employment of the taxpayer; and

  • (c) the taxpayer is living at the time the amount is received by the individual.

• Marginal note:Reasonable standby charge

  (2) For the purposes of paragraph (1)(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the “total available days”) in a taxation year during which the automobile is made available to a taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person (referred to in this subsection as the “employer”) shall be deemed to be the amount determined by the formula

  A/B × [2% × (C × D) + 2/3 × (E - F)]

  where

  A

  is

  • (a) the lesser of the total kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer’s office or employment) during the total available days and the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, if

    • (i) the taxpayer is required by the employer to use the automobile in connection with or in the course of the office or employment, and

    • (ii) the distance travelled by the automobile in the total available days is primarily in connection with or in the course of the office or employment, and

  • (b) the value determined for the description of B for the year in respect of the standby charge for the automobile during the total available days, in any other case;

  B

  is the product obtained when 1,667 is multiplied by the quotient obtained by dividing the total available days by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;

  C

  is the cost of the automobile to the employer where the employer owns the vehicle at any time in the year;

  D

  is the number obtained by dividing such of the total available days as are days when the employer owns the automobile by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;

  E

  is the total of all amounts that may reasonably be regarded as having been payable by the employer to a lessor for the purpose of leasing the automobile during such of the total available days as are days when the automobile is leased to the employer; and

  F

  is the part of the amount determined for E that may reasonably be regarded as having been payable to the lessor in respect of all or part of the cost to the lessor of insuring against

  • (a) loss of, or damage to, the automobile, or

  • (b) liability resulting from the use or operation of the automobile.

• Marginal note:Automobile salesperson

  (2.1) Where in a taxation year

  • (a) a taxpayer was employed principally in selling or leasing automobiles,

  • (b) an automobile owned by the taxpayer’s employer was made available by the employer to the taxpayer or to a person related to the taxpayer, and

  • (c) the employer has acquired one or more automobiles,

  the amount that would otherwise be determined under subsection 6(2) as a reasonable standby charge shall, at the option of the employer, be computed as if

  • (d) the reference in the formula in subsection 6(2) to “2%” were read as a reference to “1 1/2%”, and

  • (e) the cost to the employer of the automobile were the greater of

    • (i) the quotient obtained by dividing

      • (A) the cost to the employer of all new automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business

      by

      • (B) the number of automobiles described in clause 6(2.1)(e)(i)(A), and

    • (ii) the quotient obtained by dividing

      • (A) the cost to the employer of all automobiles acquired by the employer in the year for sale or lease in the course of the employer’s business

      by

      • (B) the number of automobiles described in clause 6(2.1)(e)(ii)(A).

• Marginal note:COVID-19 — automobile operating expense benefit

  (2.2) If a taxpayer met the condition in subparagraph (iv) of the description of A in paragraph (1)(k) for the 2019 taxation year in respect of the use of an automobile made available to the taxpayer, or to a person related to the taxpayer, by an employer (within the meaning assigned by subsection (2)), then for the purpose of applying paragraph (1)(k) in respect of an automobile provided by that employer in 2020 or 2021 (referred to in this subsection as the “relevant year”), the amount determined for A in paragraph (1)(k) in respect of the automobile for the relevant year is deemed to be the lesser of

  • (a) ½ of the amount determined under subparagraph (1)(e)(i) in respect of the automobile for the relevant year, and

  • (b) the amount determined under subparagraph (v) of the description of A in paragraph (1)(k) in respect of the automobile for the relevant year.

• Marginal note:COVID-19 — reasonable standby charge

  (2.3) A taxpayer is deemed to meet the condition in subparagraph (a)(ii) of the description of A in subsection (2) in respect of an employer (within the meaning assigned by subsection (2)) for the 2020 or 2021 taxation year if the taxpayer met the conditions in subparagraphs (a)(i) and (ii) of the description of A in subsection (2) for the 2019 taxation year in respect of an automobile made available to the taxpayer, or to a person related to the taxpayer, by that employer.

• Marginal note:Payments by employer to employee

  (3) An amount received by one person from another

  • (a) during a period while the payee was an officer of, or in the employment of, the payer, or

  • (b) on account, in lieu of payment or in satisfaction of an obligation arising out of an agreement made by the payer with the payee immediately prior to, during or immediately after a period that the payee was an officer of, or in the employment of, the payer,

  shall be deemed, for the purposes of section 5, to be remuneration for the payee’s services rendered as an officer or during the period of employment, unless it is established that, irrespective of when the agreement, if any, under which the amount was received was made or the form or legal effect thereof, it cannot reasonably be regarded as having been received

  • (c) as consideration or partial consideration for accepting the office or entering into the contract of employment,

  • (d) as remuneration or partial remuneration for services as an officer or under the contract of employment, or

  • (e) in consideration or partial consideration for a covenant with reference to what the officer or employee is, or is not, to do before or after the termination of the employment.

• Marginal note:Amount receivable for covenant

  (3.1) If an amount (other than an amount to which paragraph (1)(a) applies because of subsection (11)) is receivable at the end of a taxation year by a taxpayer in respect of a covenant, agreed to by the taxpayer more than 36 months before the end of that taxation year, with reference to what the taxpayer is, or is not, to do, and the amount would be included in the taxpayer’s income for the year under this Subdivision if it were received by the taxpayer in the year, the amount

  • (a) is deemed to be received by the taxpayer at the end of the taxation year for services rendered as an officer or during the period of employment; and

  • (b) is deemed not to be received at any other time.

• Marginal note:Group term life insurance

  (4) Where at any time in a taxation year a taxpayer’s life is insured under a group term life insurance policy, there shall be included in computing the taxpayer’s income for the year from an office or employment the amount, if any, prescribed for the year in respect of the insurance.

• (5) [Repealed, 1995, c. 3, s. 1]

• Marginal note:Employment at special work site or remote location

  (6) Notwithstanding subsection 6(1), in computing the income of a taxpayer for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the taxpayer in respect of, in the course or by virtue of the office or employment that is the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses the taxpayer has incurred for,

  • (a) the taxpayer’s board and lodging for a period at

    • (i) a special work site, being a location at which the duties performed by the taxpayer were of a temporary nature, if the taxpayer maintained at another location a self-contained domestic establishment as the taxpayer’s principal place of residence

      • (A) that was, throughout the period, available for the taxpayer’s occupancy and not rented by the taxpayer to any other person, and

      • (B) to which, by reason of distance, the taxpayer could not reasonably be expected to have returned daily from the special work site, or

    • (ii) a location at which, by virtue of its remoteness from any established community, the taxpayer could not reasonably be expected to establish and maintain a self-contained domestic establishment,

    if the period during which the taxpayer was required by the taxpayer’s duties to be away from the taxpayer’s principal place of residence, or to be at the special work site or location, was not less than 36 hours; or

  • (b) transportation between

    • (i) the principal place of residence and the special work site referred to in subparagraph 6(6)(a)(i), or

    • (ii) the location referred to in subparagraph 6(6)(a)(ii) and a location in Canada or a location in the country in which the taxpayer is employed,

    in respect of a period described in paragraph 6(6)(a) during which the taxpayer received board and lodging, or a reasonable allowance in respect of board and lodging, from the taxpayer’s employer.

• Marginal note:Cost of property or service

  (7) To the extent that the cost to a person of purchasing a property or service or an amount payable by a person for the purpose of leasing property is taken into account in determining an amount required under this section to be included in computing a taxpayer’s income for a taxation year, that cost or amount payable, as the case may be, shall include any tax that was payable by the person in respect of the property or service or that would have been so payable if the person were not exempt from the payment of that tax because of the nature of the person or the use to which the property or service is to be put.

• Marginal note:GST rebates re costs of property or service

  (8) If

  • (a) an amount in respect of an outlay or expense is deducted under section 8 in computing the income of a taxpayer for a taxation year from an office or employment, or

  • (b) an amount is included in the capital cost to a taxpayer of a property described in subparagraph 8(1)(j)(ii) or 8(1)(p)(ii),

  and a particular amount is paid to the taxpayer in a particular taxation year as a rebate under the Excise Tax Act in respect of any goods and services tax included in the amount of the outlay or expense, or the capital cost of the property, as the case may be, the particular amount

  • (c) to the extent that it relates to an outlay or expense referred to in paragraph (a), shall be included in computing the taxpayer’s income from an office or employment for the particular taxation year, and

  • (d) to the extent that it relates to the capital cost of property referred to in paragraph (b), is deemed, for the purposes of subsection 13(7.1), to have been received by the taxpayer in the particular taxation year as assistance from a government for the acquisition of the property.

• Marginal note:Amount in respect of interest on employee debt

  (9) Where an amount in respect of a loan or debt is deemed by subsection 80.4(1) to be a benefit received in a taxation year by an individual, the amount of the benefit shall be included in computing the income of the individual for the year as income from an office or employment.

• Marginal note:Contributions to an employee benefit plan

  (10) For the purposes of subparagraph 6(1)(g)(ii),

  • (a) an amount included in the income of an individual in respect of an employee benefit plan for a taxation year preceding the year in which it was paid out of the plan shall be deemed to be an amount contributed to the plan by the individual; and

  • (b) where an amount is received in a taxation year by an individual from an employee benefit plan that was in a preceding year an employee trust, such portion of the amount so received by the individual as does not exceed the amount, if any, by which the lesser of

    • (i) the amount, if any, by which

      • (A) the total of all amounts allocated to the individual or a deceased person of whom the individual is an heir or legal representative by the trustee of the plan at a time when it was an employee trust

      exceeds

      • (B) the total of all amounts previously paid out of the plan to or for the benefit of the individual or the deceased person at a time when the plan was an employee trust, and

    • (ii) the portion of the amount, if any, by which the cost amount to the plan of its property immediately before it ceased to be an employee trust exceeds its liabilities at that time that

      • (A) the amount determined under subparagraph 6(10)(b)(i) in respect of the individual

      is of

      • (B) the total of amounts determined under subparagraph 6(10)(b)(i) in respect of all individuals who were beneficiaries under the plan immediately before it ceased to be an employee trust

    exceeds

    • (iii) the total of all amounts previously received out of the plan by the individual or a deceased person of whom the individual is an heir or legal representative at a time when the plan was an employee benefit plan to the extent that the amounts were deemed by this paragraph to be a return of amounts contributed to the plan

    shall be deemed to be the return of an amount contributed to the plan by the individual.

• Marginal note:Salary deferral arrangement

  (11) Where at the end of a taxation year any person has a right under a salary deferral arrangement in respect of a taxpayer to receive a deferred amount, an amount equal to the deferred amount shall be deemed, for the purposes only of paragraph 6(1)(a), to have been received by the taxpayer as a benefit in the year, to the extent that the amount was not otherwise included in computing the taxpayer’s income for the year or any preceding taxation year.

• Marginal note:Idem

  (12) Where at the end of a taxation year any person has a right under a salary deferral arrangement (other than a trust governed by a salary deferral arrangement) in respect of a taxpayer to receive a deferred amount, an amount equal to any interest or other additional amount that accrued to, or for the benefit of, that person to the end of the year in respect of the deferred amount shall be deemed at the end of the year, for the purposes only of subsection 6(11), to be a deferred amount that the person has a right to receive under the arrangement.

• Marginal note:Application

  (13) Subsection 6(11) does not apply in respect of a deferred amount under a salary deferral arrangement in respect of a taxpayer that was established primarily for the benefit of one or more non-resident employees in respect of services to be rendered in a country other than Canada, to the extent that the deferred amount

  • (a) was in respect of services rendered by an employee who

    • (i) was not resident in Canada at the time the services were rendered, or

    • (ii) was resident in Canada for a period (in this subsection referred to as an “excluded period”) of not more than 36 of the 72 months preceding the time the services were rendered and was an employee to whom the arrangement applied before the employee became resident in Canada; and

  • (b) cannot reasonably be regarded as being in respect of services rendered or to be rendered during a period (other than an excluded period) when the employee was resident in Canada.

• Marginal note:Part of plan or arrangement

  (14) Where deferred amounts under a salary deferral arrangement in respect of a taxpayer (in this subsection referred to as “that arrangement”) are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income and that arrangement is part of a plan or arrangement (in this subsection referred to as the “plan”) under which amounts or benefits not related to the deferred amounts are payable or provided, for the purposes of this Act, other than this subsection,

  • (a) that arrangement shall be deemed to be a separate arrangement independent of other parts of the plan of which it is a part; and

  • (b) where any person has a right to a deferred amount under that arrangement, an amount received by the person as a benefit at any time out of or under the plan shall be deemed to have been received out of or under that arrangement except to the extent that it exceeds the amount, if any, by which

    • (i) the total of all deferred amounts under that arrangement that were included under paragraph 6(1)(a) as benefits in computing the taxpayer’s income for taxation years ending before that time

    exceeds

    • (ii) the total of

      • (A) all deferred amounts received by any person before that time out of or under the plan that were deemed by this paragraph to have been received out of or under that arrangement, and

      • (B) all deferred amounts under that arrangement that were deducted under paragraph 8(1)(o) in computing the taxpayer’s income for the year or preceding taxation years.

• Marginal note:Forgiveness of employee debt

  (15) For the purpose of paragraph 6(1)(a),

  • (a) a benefit shall be deemed to have been enjoyed by a taxpayer at any time an obligation issued by any debtor (including the taxpayer) is settled or extinguished; and

  • (b) the value of that benefit shall be deemed to be the forgiven amount at that time in respect of the obligation.

• Marginal note:Forgiven amount

  (15.1) For the purpose of subsection 6(15), the forgiven amount at any time in respect of an obligation issued by a debtor has the meaning that would be assigned by subsection 80(1) if

  • (a) the obligation were a commercial obligation (within the meaning assigned by subsection 80(1)) issued by the debtor;

  • (b) no amount included in computing income because of the obligation being settled or extinguished at that time were taken into account;

  • (c) the definition forgiven amount in subsection 80(1) were read without reference to paragraphs (f) and (h) of the description of B in that definition; and

  • (d) section 80 were read without reference to paragraphs (2)(b) and (q) of that section.

• Marginal note:Disability-related employment benefits

  (16) Notwithstanding subsection 6(1), in computing an individual’s income for a taxation year from an office or employment, there shall not be included any amount received or enjoyed by the individual in respect of, in the course of or because of the individual’s office or employment that is the value of a benefit relating to, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by the individual for,

  • (a) the transportation of the individual between the individual’s ordinary place of residence and the individual’s work location (including parking near that location) if the individual is blind or is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, because of the individual’s mobility impairment, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year; or

  • (b) an attendant to assist the individual in the performance of the individual’s duties if the individual is a person in respect of whom an amount is deductible, or would but for paragraph 118.3(1)(c) be deductible, under section 118.3 in computing a taxpayer’s tax payable under this Part for the year.

• Marginal note:Definitions

  (17) The definitions in this subsection apply in this subsection and subsection 6(18).

  disability policy

  disability policy means a group disability insurance policy that provides for periodic payments to individuals in respect of the loss of remuneration from an office or employment. (police d’assurance-invalidité)

  employer

  employer of an individual includes a former employer of the individual. (employeur)

  top-up disability payment

  top-up disability payment in respect of an individual means a payment made by an employer of the individual as a consequence of the insolvency of an insurer that was obligated to make payments to the individual under a disability policy where

  • (a) the payment is made to an insurer so that periodic payments made to the individual under the policy will not be reduced because of the insolvency, or will be reduced by a lesser amount, or

  • (b) the following conditions are satisfied:

    • (i) the payment is made to the individual to replace, in whole or in part, periodic payments that would have been made under the policy to the individual but for the insolvency, and

    • (ii) the payment is made under an arrangement by which the individual is required to reimburse the payment to the extent that the individual subsequently receives an amount from an insurer in respect of the portion of the periodic payments that the payment was intended to replace.

  For the purposes of paragraphs (a) and (b), an insurance policy that replaces a disability policy is deemed to be the same policy as, and a continuation of, the disability policy that was replaced. (paiement compensatoire pour invalidité)

• Marginal note:Group disability benefits — insolvent insurer

  (18) Where an employer of an individual makes a top-up disability payment in respect of the individual,

  • (a) the payment is, for the purpose of paragraph 6(1)(a), deemed not to be a benefit received or enjoyed by the individual;

  • (b) the payment is, for the purpose of paragraph 6(1)(f), deemed not to be a contribution made by the employer to or under the disability insurance plan of which the disability policy in respect of which the payment is made is or was a part; and

  • (c) if the payment is made to the individual, it is, for the purpose of paragraph 6(1)(f), deemed to be an amount payable to the individual pursuant to the plan.

• Marginal note:Benefit re housing loss

  (19) For the purpose of paragraph (1)(a), an amount paid at any time in respect of a housing loss (other than an eligible housing loss) to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment.

• Marginal note:Benefit re eligible housing loss

  (20) For the purpose of paragraph (1)(a), an amount paid at any time in a taxation year in respect of an eligible housing loss to or on behalf of a taxpayer or a person who does not deal at arm’s length with the taxpayer in respect of, in the course of or because of, an office or employment is deemed to be a benefit received by the taxpayer at that time because of the office or employment to the extent of the amount, if any, by which

  • (a) one half of the amount, if any, by which the total of all amounts each of which is so paid in the year or in a preceding taxation year exceeds $15,000

  exceeds

  • (b) the total of all amounts each of which is an amount included in computing the taxpayer’s income because of this subsection for a preceding taxation year in respect of the loss.

• Marginal note:Housing loss

  (21) In this section, housing loss at any time in respect of a residence of a taxpayer means the amount, if any, by which the greater of

  • (a) the adjusted cost base of the residence at that time to the taxpayer or to another person who does not deal at arm’s length with the taxpayer, and

  • (b) the highest fair market value of the residence within the six-month period that ends at that time exceeds

  • (c) if the residence is disposed of by the taxpayer or the other person before the end of the first taxation year that begins after that time, the lesser of

    • (i) the proceeds of disposition of the residence, and

    • (ii) the fair market value of the residence at that time, and

  • (d) in any other case, the fair market value of the residence at that time.

• Marginal note:Eligible housing loss

  (22) In this section, eligible housing loss in respect of a residence designated by a taxpayer means a housing loss in respect of an eligible relocation of the taxpayer or a person who does not deal at arm’s length with the taxpayer and, for these purposes, no more than one residence may be so designated in respect of an eligible relocation.

• Marginal note:Employer-provided housing subsidies

  (23) For greater certainty, an amount paid or the value of assistance provided by any person in respect of, in the course of or because of, an individual’s office or employment in respect of the cost of, the financing of, the use of or the right to use, a residence is, for the purposes of this section, a benefit received by the individual because of the office or employment.