Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Taxation of cash prizes awarded to Olympic athletes.
Position: Cash prizes do not qualify as a prescribed prize.
Reasons: The definition of prescribed prize would not include these amounts.
November 3, 2016
XXXXXXXXXX
Dear XXXXXXXXXX:
The office of the Right Honourable Justin Trudeau, Prime Minister of Canada, sent me a copy of your correspondence about the taxation of the monetary awards that Olympic athletes receive. Thank you for your understanding regarding the delay of this response.
You believe that successful Olympic athletes should not have their cash prizes taxed. Canadians are proud of their Olympic athletes’ accomplishments, and the Government of Canada recognizes that sports are a defining part of Canada’s identity. The Government is committed to supporting Canada’s amateur athletes through tax measures and its partnerships with programs such as the Own the Podium program.
However, under the Income Tax Act, all amounts a taxpayer receives in a tax year as, or on account of, a prize for achievement in a field of endeavour ordinarily carried on by the taxpayer, other than a prescribed prize, must be included in the taxpayer’s income for that tax year. The performance awards athletes receive from programs like the Athlete Excellence Fund do not qualify as a prescribed prize. However, in many cases, the performance awards may be contributed to an amateur athlete trust. The funds held in the trust are not taxable until the date they are distributed to the athlete or eight years after the last year in which the athlete was eligible to compete as a Canadian national team member.
The Canada Revenue Agency administers and enforces the Act as passed by Parliament. The Department of Finance Canada is responsible for changing tax policy and amending the Act. I am therefore sending a copy of our correspondence to the Honourable Bill Morneau, Minister of Finance, for his consideration.
I appreciate the opportunity to respond to your concerns and trust the information I have provided is helpful.
Sincerely,
The Honourable Diane Lebouthillier, P.C., M.P.
c.c.: The Honourable Bill Morneau, P.C., M.P.
Minister of Finance
Bill.Morneau@parl.gc.ca
George A Robertson
905-721-5196
2016-066486
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