27 May 2003 Internal T.I. 2003-0015727 - ANNUAL 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: Are annual dues paid to a trade union located outside of Canada deductible?

Position: Yes, provided the purposes of the trade union include the regulation of relations between employers and employees and all other requirements of subsections 8(1) and 8(5) of the Act have been met.

Reasons: For purposes of paragraph 8(1)(i)(iv) of the Act, a trade union is as defined by section 3 of the Canada Labour Code. The definition in the Canada Labour Code does not restrict a "trade union" to Canadian organizations.

		May 27, 2003

	Frances Main	HEADQUARTERS
	Client Services and Systems Librarian	Karen Power, CA
	Vancouver Tax Services Office	(613) 957-8953

2003-001572

Deductibility of Union Dues

We are writing in reply to your email of May 5, 2003 regarding the above-noted subject matter. You enquire whether a resident of Canada employed in California as a XXXXXXXXXX is entitled to deduct union dues paid to the XXXXXXXXXX in California, in respect of that employment.

Our comments:

Subparagraph 8(1)(i)(iv) of the Income Tax Act (the "Act") permits an employee to deduct in computing income from an office or employment annual dues paid to maintain membership in a trade union. For purposes of subparagraph 8(1)(i)(iv) of the Act, a "trade union" is as defined by section 3 of the Canada Labour Code, or as defined in any provincial statute providing for the investigation, conciliation or settlement of industrial disputes. The Canada Labour Code defines "trade union" as "any organization of employees, or any branch or local thereof, the purposes of which include the regulation of relations between employers and employees".

We would agree with your analysis that the above definition does not restrict a "trade union" to Canadian organizations. In our view, subparagraph 8(1)(i)(iv) of the Act, would allow the deduction of annual dues paid to maintain membership in a trade union located outside of Canada provided that the purposes of the trade union include the regulation of relations between employers and employees and all other requirements of subsections 8(1) and 8(5) of the Act have been met.

We trust our comments will be of assistance.

Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch