I have an issue on the go with the CRA that I would
like your opinion on:
CRA completed an audit on my employer and
has said that the employers (ER) contributions to the employees (EE) RPP are a
taxable benefit to the EE.
Revised T4’s for 2015 and 2016 have been issued
with the only change being an increase in box 14
equal to the amount of the ER’s RPP contributions and an explanation in box 40. For clarity: box 20 (RPP contributions) and box
52 (pension adjustment) didn’t change.
-
The way I see it, with these T4 changes, the
taxation result will be as follows:
EE
will pay tax on the amount of the ER RPP contribution in the current year (and
reassessed years)
EE
will pay tax again on the same funds in the future when the funds are withdrawn
from the RPP….double taxation
EE
will have their eligible RRSP contribution amount reduced by the amount of the ER RPP contribution without the
associated tax deferral benefit
I have talked with most senior CRA advisors available through telephone help. They agree that the concept of double taxation doesn't seem correct but they offer no advice on what to do about it.
In summary my questions are:
Is my logic correct?
Am I correct in arguing the double taxation?
If I am correct, is there something I can
reference to the CRA to argue my case?
