14 December 2010 External T.I. 2010-0380591E5 - Employer withholding obligations

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Are Employer withholding obligations eliminated because an employee's name allegedly includes a trademark?

Position: No

Reasons: An employer is required to withhold income taxes from remuneration.

XXXXXXXXXX
									2010-038059
									Rita Ferguson
									519-645-5261
December 14, 2010

Dear XXXXXXXXXX :

Re: Technical Interpretation Request - Employee's Name with a Trade Mark

This is in response to your email of September 16, 2010 concerning the requirement to withhold income tax and other deductions from remuneration for a new employee. The employee has indicated that due to the fact that he has changed his name to include a trade mark, he is no longer required to pay any taxes.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advanced Income Tax Rulings", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.

Paragraph 153(1)(a) of the Income Tax Act (the "Act") stipulates that a person paying salary, wages or other remuneration must deduct or withhold from the payment an amount determined in accordance with prescribed rules, and to remit such amount to the Receiver General. The definitions in subsection 248(1) of the Act provide that an employee means an individual holding a position in the service of some other person. An "individual" means a person other than a corporation. Where an employer/employee relationship exists, the fact that an individual has allegedly changed his name to include a trade mark does not affect that person's status as an employee, nor does it affect the employer's obligations to withhold and remit deductions at source from remuneration paid.

The 2006 Alert, "The Canada Revenue Agency debunks common tax myths!" addresses some misleading statements and myths about Canada's tax laws and the way they are administered. You may find this information helpful. This Alert may be found on the CRA website at http://www.cra-arc.gc.ca/nwsrm/lrts/2006/060425-eng.html.

We trust that these comments have been of assistance.

Yours truly,

Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch