13 November 2002 External T.I. 2002-0165095 - Deduction of border fees

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: A Canadian resident travels to the U.S. each day for employment. Are fees paid at the Canada-U.S. border deductible from income tax?

Position: Probably not.

Reasons: The fees do not appear to be provided for in section 8 of the Act.

XXXXXXXXXX 2002-016509
S. E. Thomson
November 13, 2002

Dear XXXXXXXXXX:

Re: Deduction of border "fees"

This is in reply to your letter of September 23, 2002, in which you ask if certain fees you have incurred are deductible from your income for income tax purposes. You explain that you are employed as an XXXXXXXXXX, and that you drive from your home in XXXXXXXXXX to your employer's place of business in the U.S. each day. You are required to pay certain fees to cross the Canada-U.S. border.

The Income Tax Rulings Directorate is unable to comment directly on a taxpayer's situation except in the context of an advance income tax ruling in respect of proposed transactions. Since your situation is one that already exists, we suggest that you contact your local tax services office who will be able to assist you in determining the appropriate tax consequences. However, we are able to provide you with the following general comments on the provisions of the Income Tax Act (the "Act"), which may or may not apply to your situation.

An employee is entitled to deduct expenses incurred to earn employment income only if they are permitted by section 8 of the Act. For information on some of these deductions, please see Interpretation Bulletin IT-522R Vehicle, Travel and Sales Expenses of Employees available on our website at www.ccra-adrc.gc.ca. Paragraphs 31 and 32 address the travel expenses of employees in general. Note that in order to deduct travel or vehicle expenses, the employee is required to work away from the employer's place of business and is required to incur the expenses by the terms of the employment contract. Note also in paragraph 14 that traveling between the employee's home and the place of business is considered to be a personal expense, and is therefore not deductible.

The Canada Customs and Revenue Agency is responsible for administering the Act as it is written. Any requests for changes to the legislation should be addressed to the Department of Finance, which we see you have already done.

We trust that our comments have been helpful.

Yours truly,

Olli Laurikainen
for Director
International & Trusts Division
Income Tax Rulings Directorate
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