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This interpretation letter was issued based on the specific circumstances or situation of a taxpayer or vendor and the law and tax policy in effect at the time the ruling was issued. Specific facts relevant to your situation may change the application of the tax. In accordance with the Freedom of Information and Protection of Privacy Act, all confidential and identifying information has been removed from this interpretation letter. Please be aware that any statute or policy referred to in this letter may have been superseded. Where a letter contains links to a publication, the link is to our current publication on that subject, regardless of the date that the ruling was originally issued, and the current publication may not be reflective of the information originally provided. In no event shall the Government of Ontario be liable for any damages whatsoever arising out of, or in connection with, the use of the information contained herein.
Interpretation Letter 07-0254, January 2008
I refer to your correspondence dated XXXX, 2007 regarding remuneration paid to Quebec resident employees, and the Ontario Employer Health Tax (EHT).
EHT is payable by all employers who pay remuneration to employees who:
Remuneration paid to employees who report for work at a PE of the employer outside of Ontario is not subject to EHT.
A PE usually consists of a physical structure or building where employees work such as an agency, a branch, a factory, a farm, a gas well, a mine, an office, an oil well, timberland, a warehouse and a workshop. A PE may also exist or be deemed to exist where the employee:
From your correspondence and our conversations I understand that:
A home office is not required by employment contract, nor does the employer pay any rent for exclusive use of space in the employees' homes. Telephone numbers listed on the Reps' business cards are their cell phone numbers and the Toronto, Ontario, head office toll free number. Reps in Quebec do not have general authority to contract. Reps are hired, paid and supervised from Company A's head office in Toronto, Ontario; therefore, they are regarded as attached to the office in Ontario.
Customers submit their sales orders directly to the office in Ontario for approval. The orders are then transmitted to a rented warehouse in Montreal, Quebec for shipping. Company A's employees do not work at the warehouse. The warehouse is used for storage of stock and shipping is done by employees of Company B. Company A has no control over the day to day operations at the warehouse. No advertising is done to show the space as belonging to Company A.
Based on the information provided, it is our opinion that, remuneration paid to the Quebec resident employees is subject to EHT based on the facts that they report for work at Company A's office in Toronto, and that they are paid from the head office in Toronto, Ontario. You should request a refund from the Ministère du Revenue du Quebec for contributions made in error to the Quebec Health Services Fund.