It took Prime Minister Justin Trudeau a few days to make a statement on the CRA employee discount proposal.
Let me be blunt: we are not going to tax anyone's employee discounts. Minister @DiLebouthillier has asked the CRA to fix this.
— Justin Trudeau (@JustinTrudeau) October 11, 2017
In a document that was posted on their website, the Canada Revenue Agency (CRA) said that discounts available to retail employees on the purchase of merchandise should be considered taxable benefits.
Even after the new guidelines issued by the CRA, which could eventually lead to taxes being implemented on employee discounts, the Canadian revenue minister stands her ground saying she isn’t specifically targeting the retail workers in the country.
According to these guidelines, the employers are urged to include the value of these discounts (employment benefit) in the total income of the employee at the time of filing taxes.
“However, no amount is included in the employee’s income if the discount is also available to the general public or to specific public groups,” – stated the CRA folio.
The onus of monitoring the amount of money an employee saves from the employee discounts they availed in a year lies with the employers. This is mainly because the T4s – statement of remuneration paid – is filed by the employers on behalf of their employees.
Marco Mendicino – a Liberal MP – said the entire process is aimed at “clarifying” the law for the lay man.
“If you’ve got an employee discount that is not available to the public at any point in time, then it will be categorised as a taxable benefit,” – he said.
On the other hand, the Retail Council of Canada is not in favour of the proposed stipulation, calling it a “potentially horrendous burden” on both the employees and the employers.
Previously, employee discounts on merchandise were taxable only when the price paid by employees was less than the product’s actual cost bore by the employer.
The CRA needs to back off to avoid incredible backlash.
Meagan Kozlovs is a reporter for Debate Report. She’s worked and interned at Global News Toronto and CHECX. Megan is based in Toronto and covers issues affecting her city. In addition to her severe milk shake addiction, she’s a Netflix enthusiast, a red wine drinker, and a voracious reader.