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employee profit-sharing plan

By Occasional Contributors | 3 Minutes Read June 24, 2013

Arrangement did not constitute an employee profit-sharing plan: CPP payments required

The Federal Court of Appeal just decided that an accountant who received payments from a professional corporation he created did not properly create an arrangement that constituted a true employee profit-sharing plan. It was necessary for the professional corporation to make an election that payments would be based on profits; failing that, it was necessary for the professional corporation to have a set formula stating an amount to be computed by reference to profits so the employer was obligated to pay that amount to the trustees under the arrangement.

Article by Occasional Contributors / Business, Finance and Accounting / accountant, canada pension plan, Canada Revenue Agency, chartered accountant, contributory salary and wages, CPP payments, CRA, employee profit-sharing plan, federal court of appeal, Income Tax Act, payments based on profits, payments from a professional corporation, Tax Court of Canada

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