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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
deductibility of tools and workboots by employee auto mechanics
Position:
no provision in ITA to allow
Reasons:
MINISTER/DEPUTY MINISTER'S OFFICE 97-07371M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER
XXXXXXXXXX
March 11, 1998
Dear Colleague:
Thank you for your letter of November 14, 1997, regarding your constituent's concerns about salaried auto mechanics who are required to purchase their own tools and workboots. It is always a pleasure for me to address the concerns of residents of British Columbia.
Generally, there is no provision in the Income Tax Act which permits employees to deduct the cost of purchasing employment-related equipment or clothing. If an employer reimburses employees or makes payments to offset the cost of tools that employees are required to have in order to perform their work, the amount of the payment or reimbursement is required to be included in the employees' incomes. Similarly, if an employer supplies equipment such that ownership of the equipment is transferred to the employees or the equipment is otherwise permitted to be used for personal reasons by the employees, a taxable benefit will generally result. However, if an employer supplies employees with safety footwear, or other special clothing, which is designed for protection from the particular hazards of the employment, the employees are not considered to have received a taxable benefit.
The issue of deductions for employees' expenses has previously been discussed before the Standing Commitee on Finance. The Canadian Automotive Repair and Service Institute raised some of the same issues as your constituent. I enclose a copy of the report tabled in the House of Commons on June 10, 1992, which highlights some of the difficulties in finding an equitable solution to this issue. As a legislative solution would be required in these circumstances, I have forwarded a copy of your letter to the Honourable Paul Martin, Minister of Finance, who is responsible for amendments to the Act.
I trust my comments have addressed your concerns.
Yours sincerely,
Herb Dhaliwal, P.C., M.P.
Encl.
Sandra Short
January 20, 1998
957-2136
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