Tax - Income tax - Employment income
Taxpayer was life insurance broker employed by G Inc., was majority shareholder of G Inc. and was director and officer. Commissions in respect to any life insurance policies placed through services of taxpayer were paid to, and received by, G Inc. and G Inc. paid salary to taxpayer for services he provided on its behalf. In 2014, taxpayer purchased life insurance policy with benefit amount of $1,000,000 on his own life. Insurer paid first year commission in amount of $20,822.41 to G Inc. and bonus commission of $36,439.22 was paid in respect of policy by C Ltd. to G Inc.. In 2014, G Inc. paid salary of $111,617 to taxpayer and relying on Canada Revenue Agency (CRA) administrative policy, taxpayer deducted from his salary $57,261.53, which represented total of commissions in respect of policy. CRA issued reassessment to disallow deduction of commissions. Taxpayer appealed. Appeal dismissed. Nothing in s. 8 of Income Tax Act permitted taxpayer, in computing his income from employment in 2014, to deduct commissions received by G Inc. in respect of policy. Commission income earned by life insurance broker was taxable. If CRA determined that particular taxpayer did not qualify for favourable treatment set out in CRA’s administrative policy, taxpayer’s appeal could not be decided in manner that was inconsistent with Act. Even if administrative policy could be applied, taxpayer did not come within that policy.
Ghumman v. The Queen (2019), 2019 CarswellNat 2252, 2019 CarswellNat 2324, 2019 TCC 125, 2019 CCI 125, Don R. Sommerfeldt J. (T.C.C. [Informal Procedure]).
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