7 November 2001 External T.I. 2001-0096015 - REIMBURSEMENT OF PROFESSIONAL DUES

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: whether refund of professional dues by professional body is taxable

Position: yes

Reasons: 6(1)(j)

		2001-009601
XXXXXXXXXX 	Denise Dalphy, LL.B.
(613) 957-9231
November 7, 2001

Dear XXXXXXXXXX:

Re: Refund of Amounts Paid as Registration Fees

We are writing in reply to your letter dated August 3, 2001 wherein you enquired about the income tax consequences for persons who receive a refund of amounts paid as registration fees.

Our understanding of the facts is as follows:

XXXXXXXXXX.

OUR COMMENTS

Written confirmation of the consequences inherent in particular transactions are given by this directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4. If, however, the particular transactions are partially completed or completed, the enquiry should be addressed to the relevant Tax Services Office. Notwithstanding the foregoing, we are providing the following comments.

Paragraph 6(1)(j) of the Act requires the following amounts to be included in a person's income from office or employment, regardless of whether it is an employer or another person who pays the amount:

6(1)(j) Reimbursements and awards

"(j) amounts received by the taxpayer in the year as an award or reimbursement in respect of an amount that would, if the taxpayer were entitled to no reimbursements or awards, be deductible under subsection 8(1) in computing the income of the taxpayer, except to the extent that the amounts so received

(i) are otherwise included in computing the income of the taxpayer for the year, or

(ii) are taken into account in computing the amount that is claimed under subsection 8(1) by the taxpayer for the year or a preceding taxation year;"

[emphasis added]

Accordingly, regardless of whether a particular XXXXXXXXXX actually deducted the dues paid to the XXXXXXXXXX, provided that the amounts were deductible under subsection 8(1) of the Act, the amounts refunded to XXXXXXXXXX must be included by each XXXXXXXXXX in computing his or her income from employment in the year when he or she receives the reimbursement.

The XXXXXXXXXX may be required to withhold income taxes and provide the XXXXXXXXXX with T4A slips. As such, we have enclosed the 2000 Employers' Guide for your reference. In particular we refer you to page 5 of the Guide.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this specific disclaimer in all instances in which we provide an opinion.

Yours truly,

Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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