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: Whether expenditure for travel incurred by travel agents are deductible employment expenses.
Position: Unable to Rule
Reasons: Question of Fact. The particular facts of each trip would have to be examined.
XXXXXXXXXX 2006-017832
Shaun Harkin, CMA
May 11, 2006
Dear XXXXXXXXXX:
Re: Advance Income Tax Ruling Request
XXXXXXXXXX (the "Company")
This is in reply to your letter of March 2, 2006, wherein you requested an advance income tax ruling in respect of policies and transactions proposed by the Company.
You requested a ruling as to whether employees of a travel agency would be able to deduct amounts under paragraph 8(1)(h) or (g) of the Income Tax Act (the "Act"). As discussed in our phone conversation of May 5, 2006 (Harkin/XXXXXXXXXX) we are unable to rule on this question of fact. However, as requested, we will provide the following general comments.
With respect to travelling expenses relating to trips by travel agents, it is our view that where the travel agent is not required by their employer to take these trips, expenses incurred in connection therewith should not be deductible. We say this primarily because the travel agent is not contractually bound to take the trip, and secondly because such costs are in the nature of a personal or living expense.
Whether amounts claimed by a travel agent for a trip, where the travel agent is contractually bound to take such a trip, are deductible under section 8 of the Act is a question of fact since this determination would depend on the particular facts of each trip.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.
We trust the above comments are of assistance.
Yours truly,
Randy Hewlett
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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