14 December 1990 Ruling 900691 F - Membership 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.

SUBJECT:  Membership Fees, Subparagraph 18(1)(l)(ii)

This is in reply to your memorandum of May 4, 1990 and further our telephone conversations concerning 24(1) and the deductibility of health club fees. We apologize for the delay necessary for the reconsideration of the policy issues involved.

After careful consideration of the taxpayer's arguments set out in your memorandum and consultation with officials of the Department of Finance, we agree with you that the 24(1) are "clubs" within the ordinary meaning or that term and that their primary purpose is to provide recreational facilities for their members. Accordingly, pursuant to subparagraph 18(1)(l)(ii) of the Act, fees or dues of any description paid to these clubs are not deductible to the payor.

The 1979 letter to 24(1) referred to in your memorandum indicates that the views set out therein were not to be considered as a precedent and that the matter was under review by the Department. This letter was issued before the Department obtained clarification of the intended policy from the Department of Finance. Our present position that such fees are not deductible has been in place since 1981.

If we can be of any further assistance to you on this question, please do not hesitate to contact us at the above number.

B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c.     Mr. R. Shultis, Publications DivisionMr. A. Bissonnette, Source Deductions Division