12 April 1991 Ruling 903203A F - Professional Dues Paid by Employer

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.

Dear Sirs:

Re:  Professional Dues paid by Employer

This is in reply to your letter of November 9, 1990.  We apologize for the unavoidable delay in responding, necessitated by confirmation of our Assessing practices and contract with 24(1)

Paragraph 8(1)(i) of the Act permits a deduction from income from an office or employment for certain dues paid by the taxpayer in the year to the extent that he has not been reimbursed, and is not entitled to be reimbursed in respect thereof.  Hence, where membership dues are paid by an employer there is no deduction available to the employee.  However, we will administratively permit a deduction to an employee whose dues have been paid by his employer in those instances where the employer is required to include the payment in the employee's income as a taxable benefit and if the employee otherwise qualifies under paragraph 8(1)(i) of the Act for the deduction.

To otherwise qualify for deduction under paragraph 8(1)(i), the payment of the dues must be necessary to maintain a professional status recognized by statute.  As you may be aware, the Federal Court - Trial Division recently confirmed our Department's position that professional dues paid to the Appraisal Institute of Canada and the Institute of Municipal Assessors of Ontario were not deductible since neither organization was recognized by statute on your behalf, we attempt to verify  whether the Professional status of 24(1)   is recognized by a Canadian provincial or foreign statute.   We were unable to get confirmation that a statute exists which recognizes the professional status of (24)(1) however, we have not examined some American State legislation which appears to have formally adopted 24(1)

You may wish to pursue this area further on behalf of your members.  We are enclosing information received by us from 19(1) on the chance that it may be of assistance to you

The determination of whether the payment of professional and other membership fees by an employer in respect of an employee is a taxable benefit to the employee depends upon who is the primary beneficiary of the payment.

Where an employee maintains membership in a particular organization because of a legal requirement or because of a job requirement, such as a specification contained in a classification standard or in a job description, the payment of reasonable membership fees by the employer would not be considered a taxable benefit to the employee.

We trust the above comments are of assistance to you.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c.     Hugh Bardon Office of the Comptroller General of Canada