8 February 2007 External T.I. 2006-0186091E5 - Tree Planting - Employment expenses

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: 1) Can equipment and supplies be claimed as employment expenses?

2) Can transportation from residence to the tree planting camps be claimed as an expense?

Position: Question of fact.

Reasons: 1) Depends upon the facts and whether subparagraph 8(1)(i)(iii) applies.

2) No.

									2006-018609
XXXXXXXXXX 								Joy Bertram, CGA, CPA(vt)

February 8, 2007

Dear XXXXXXXXXX:

Re: Tree Planting Employment Expenses

We are writing in response to your e-mail of May 12, 2006, wherein you requested our opinion on whether certain equipment, supplies and transportation expenses can be claimed as employment expenses. We apologize for the delay in responding.

You indicated that you are responsible for purchasing your equipment including a shovel, planting bags and safety equipment and supplies including a tent, sleeping bag, boots and rain gear. You pay for your own transportation from your residence to the bush camps where you stay for four to five days with two days off in a remote northern town each week. You indicated that your employer has signed form T2200 Declaration of Conditions of Employment.

Our Comments

Written confirmation of the tax implications inherent in particular transactions is given by the Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out Information Circular 70- 6R5, Advance Income Tax Rulings, dated May 17, 2002. The determination of whether an amount will qualify as an employment expense is a question of fact. However, based on the information provided to us, we are prepared to offer the following general comments, which may be of assistance.

Subsection 8(2) of the Income Tax Act (the Act) provides that no deductions are allowed in computing a taxpayer's income for a taxation year from an office or employment except as specifically enumerated in section 8. In addition, subsection 8(10) requires the employer to sign form T2200, certifying that the particular expenses were required to be incurred by the employee and that the employee meets the requirements of the particular provision in section 8 that authorizes the deduction.

In terms of the expenses you described, subparagraph 8(1)(i)(iii) does allow an employee a deduction for the cost of certain supplies that are used up, consumed, or worn out directly in the performance of duties of employment. However, any types of tools which fall into the category of equipment would generally not be deductible. We do not have sufficient information to determine whether the expenses you described would meet these requirements. For more information see Bulletin IT-352R2 Employees Expenses and Guide T4044 Employees Expenses.

In terms of the cost of travelling between an employee's home and the place where the employee regularly reports to work, it is the Agency's general position that these expenses are personal and cannot be considered incurred for travelling in the course of employment for purposes of paragraph 8(1)(h.1) or paragraph 8(1)(h) of the Act, the provisions whose requirements would have to be met for an employee to obtain such a deduction. For more information see Bulletin IT-522R Vehicle, Travel and Sales Expenses of Employees.

We suggest that you visit your nearest Agency Tax Service Office for their assistance in making such determinations in your specific case.

We trust the above will be of assistance to you.

Yours truly,

Randy Hewlett
Manager
Business and Personal Section
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch