Translation disclaimer
This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.
Principal Issues: [TaxInterpretations translation]
Are personal protective clothing and tools used by forestry workers in the course of their work deductible?
Position:
No. However, there is an exception for power saws.
Reasons:
According to 8(1)(i)(iii), only supplies "consumed" directly in the performance of the duties of the office or employment may be deducted. IC-74-6R2 provides an exception for forestry workers with respect to power saws, which are considered "consumable" goods because they have a very short lifespan.
XXXXXXXXXX 2001-006431
N. Deslandes, CGA
July 19, 2001
Dear Madam,
Subject: Request for technical interpretation: Employment expenses related to personal protective equipment for salaried forestry workers
This is in response to your letter of August 23, 2000, sent to us by the Quebec Tax Services Office on January 8, 2001, requesting our opinion on the above subject.
You informed us of certain difficulties encountered by forestry workers in the course of their employment. In particular, you provided us with the following information:
Because of the dangers associated with their employment, forestry workers are required by the Regulation respecting industrial and commercial establishments to wear or use the equipment provided for their protection against the risks to which they are exposed.
Although paragraph 11 of section 51 of the Act respecting occupational health and safety stipulates that:
"51. Every employer must …
(11) provide the worker, free of charge, with all the individual protective means and equipment selected by the health and safety committee … or, as the case may be, the individual or collective protective means and equipment determined by regulation, ..."
The reality is that, in many cases, employees must pay for the equipment they need to protect themselves.
In addition, you emphasized the seasonal nature of this industry, which limits the income that forestry workers can earn and the excessively high expenses they must face. You list a few of them: in terms of tools, they have to provide the following: planters, brush cutters, chain saws, and so on. In terms of personal protective equipment, you presented us with, among others, the following list: helmets, face shields, safety glasses, hearing protectors, rigid leggings and safety shoes that comply with certain standards.
Question:
You have asked us for our opinion on the deductibility of personal protective equipment and work tools that employees in the forestry sector must obtain to perform their duties.
As stated in paragraph 22 of Information Circular 70-6R4 dated January 29, 2001, it is the practice of our Directorate not to issue written opinions regarding proposed transactions otherwise than by way of advance rulings. Furthermore, when it comes to whether a completed transaction has received appropriate tax treatment, that determination rests first with our Tax Services Offices following their review of all facts and documents, which is usually performed as part of an audit engagement. However, we can offer the following general comments that we hope may be helpful to you.
In computing a taxpayer's income from an office or employment, subsection 8(2) of the Income Tax Act ("the Act") provides that only the amounts set out in section 8 are deductible.
Furthermore, paragraph 8(1)(i) provides that a taxpayer may deduct in computing income from an office or employment:
amounts paid by the taxpayer in the year as
[…]
(iii) the cost of supplies that were consumed directly in the performance of the duties of the office or employment and that the officer or employee was required by the contract of employment to supply and pay for,
The expression "consumed" is not defined in the Act. The "Petit Robert" dictionary provides the following definition: [TaxInterpretations translation]
"Consume": to bring (a thing) to destruction by using its substance, to make use of it in a way that renders it unusable.
Thus, the supplies that can be deducted are restricted to items that are used directly in the performance of tasks and that cannot subsequently be reused in similar work. In our opinion, the nature of a tool or personal protective clothing is such that this type of property is not consumed during its use and does not constitute an eligible expense pursuant to subparagraph 8(1)(i)(iii).
You will also note that paragraph 9 of Interpretation Bulletin IT-352R2, Employee's Expenses, Including Work Space in Home Expenses, gives a few examples of supplies "consumed" directly in the performance of duties. Among other things, for employees in the forestry sector, gasoline and oil used in the operation of power saws would be supplies "consumed" and, therefore, deductible expenses to the extent that the conditions of section 8 of the Act are satisfied. Paragraph 3 of Information Circular 74-6R2, Power Saw Expenses, states the following with respect to power saws:
“3. While no provisions of the law permit an employee to claim capital cost allowance on a power saw, the Department’s research has indicated that such saws have a very short life and therefore, a sufficiently broad interpretation can be placed on subparagraph 8(1)(i)(iii) of the Income Tax Act for the Department to allow an employee to deduct the actual cost of a saw purchased during the year …”
No other tools, equipment or personal protective clothing are covered by that Circular.
In addition, for information purposes only, we wish to address the issue of allowances paid by an employer for the acquisition of special clothing designed for protection from the particular hazards of the employment. As stated in Interpretation Bulletin IT-470R, Employees' Fringe Benefits, where an employee receives a reasonable allowance from the employer and must present a receipt to justify the purchase of distinctive clothing or clothing designed for protection from the particular hazards of the employment, this allowance does not constitute a taxable benefit.
In conclusion, there is no provision in the Act that allows an employee to deduct an amount in respect of tools, equipment or personal protective clothing that the employee must provide in the course of employment. An amendment to the Act would therefore be necessary to make such expenses deductible for employees in the forestry sector. The Canada Customs and Revenue Agency's mandate is to administer the Act, and the Department of Finance is responsible for developing tax policies and amending the Act. We invite you to contact them if you are of the view that an amendment to the Act is necessary in the circumstances.
The publications referred to herein are available on our website at the following address: www.ccra-adrc.gc.ca.
These comments do not constitute advance income tax rulings and are not binding on the Canada Customs and Revenue Agency. We hope you find them of assistance.
Best regards,
Ghislaine Landry, CGA
Manager
Individuals, Business and
Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate
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