12 September 2007 External T.I. 2007-0222521E5 - Deduction from Employment Income - Passport 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.

Principal Issues: Whether a deduction from employment income is available with respect to the costs to renew a passport, which is an expense incurred to travel in the course of employment as an international flight attendant.

Position: No.

Reasons: This expense is not listed as expenditures eligible for deduction under section 8 of the Act.

									2007-022252
XXXXXXXXXX 								Joy Bertram,
B. Comm, CGA, CPA(vt)
September 12, 2007						(613) 957-8954

Dear XXXXXXXXXX:

Re: Passport Renewal Fees

This is in response to your email of January 29, 2007 inquiring whether a deduction from employment income is available with respect to the costs to renew a passport, which is an expense incurred to travel in the course of employment as an international flight attendant. You indicated that you are required to pay this fee according to your contract of employment.

The CRA's general views regarding employment expenses are contained in Interpretation Bulletins IT-352R2, "Employee's Expenses, Including Work Space in Home Expenses" and IT-522R, "Vehicle, Travel and Sales Expenses of Employees" and also in Guide T4044, "Employment Expenses."

Section 8 of the Income Tax Act (the "Act") allows an employee to take certain specified deductions from employment income. However, in order to be eligible for a deduction, the particular expense must be one of the items listed in the legislation. Although paragraph 8(1)(h) of the Act allows a deduction for travel expenses (provided certain conditions are met), this deduction applies to expenses directly incurred in travel, such as accommodation, meals and transportation. Expenses such as costs to renew a passport do not qualify for deduction under this or any other paragraph in section 8 of the Act.

Although there is no deduction available for the payment of passport fees, we note that new subsection 118(10) of the Act provides a non-refundable tax credit called the Canada Employment Credit. First effective in 2006, this credit recognizes that employees often incur various work related expenses. There is no requirement that a specific employment expense be proven. Rather, the credit is simply calculated as the lesser of an indexed amount ($1,000 for 2007) or the total of all income from office or employment for the year (not including any deductions under section 8 of the Act, described above) multiplied by the appropriate percentage for the year. For 2007, this percentage is 15.5%.

We trust that these comments will be of assistance.

Yours truly,

Renée Shields,
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch