Information and Disclaimer
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 Please be aware that any statute or policy referred to in this letter may have been superseded.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 08-0095, December 2008
We refer to your letter regarding Company A and the Employer Health Tax (EHT) Act.
An eligible employer which is associated with other employers is required to share the exemption amount with the other employers belonging to the associated group. In order to determine whether or not employers are associated, the EHT Act adopts the association rules under section 256 of the Income Tax Act (Canada) (ITA). Although these rules refer to corporations, their application is extended to include individuals and partnerships for EHT purposes.
From the information you have provided, I understand that:
- Company A is a partnership owned 32% by Company C, 32% by Company D, and 36% by Company F
- Company C is owned 51% by Individual A, and 49% by Individual B
- Company D is owned 50% by Individual C and 50% by Individual D
- Company F is owned 100% by Individual E
- Individual's A and B are not related to Individual's C and D
- Individual E is not related to Individual A, B, C, or D
- When Company A was first established, a new business number (BN) was erroneously requested under the BN of Company C, creating an RP0002 account
- There are no inter-company business relationships, nor any economic dependencies.
Based on the information you have provided, it is our opinion that Company A is not associated with Company C, Company D, or Company F. None of these entities has control over another through de jure control (ownership of shares), nor does it appear to have control over another through significant influence. Therefore, Company A is not required to share its tax exemption.
