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: are dues paid to XXXXXXXXXX deductible under 8(1)(i)(iv) as annual dues to maintain membership in an association of public servants, the primary object of which is to promote improvement of the member's conditions of employment or work.
Position: amounts deductible
Reasons: bylaws reflect primary purpose test is met, membership restricted to public servants
Advance Ruling Request on the Deductibility of Membership Fees
This is in reply to your letter of XXXXXXXXXX in which you requested an advance income tax ruling on behalf of the above noted organization. We further acknowledge your letter of XXXXXXXXXX, our telephone conversation of XXXXXXXXXX and your correspondence of XXXXXXXXXX wherein you provided additional information with respect to the facts and proposed transactions.
We understand that, to the best of your knowledge, none of the issues raised in this ruling are being considered by a Taxation Services Office, no tax return has yet been filed by the XXXXXXXXXX (the "Corporation"), and no member has yet filed a return reporting the deduction of such fees.
Our understanding of the facts, proposed transaction and the purpose of the proposed transactions is as follows:
1. The Corporation was created XXXXXXXXXX and has not yet had a year end.
3. This Corporation was created due to the XXXXXXXXXX.
4. Membership in the Corporation is voluntary.
7. Membership fees will be paid by the Members of the Corporation by pre-authorized payment deducted from the Member's regular salary/wage payments during each regular pay period for the member. Accordingly, XXXXXXXXXX, will deduct the membership fees and remit them to the Corporation in order for a member to be in good standing.
Purpose of the Proposed Transactions
8. The Members intend to deduct from their employment income the fees paid to the Corporation pursuant to subparagraph 8(1)(i)(iv) as annual dues to maintain membership in an association of public servants the primary object of which is to promote the improvement of the members' conditions of employment or work, to the extent that the taxpayer has not been reimbursed, and is not entitled to be reimbursed in respect thereof.
Rulings Requested and Given
Provided that the preceding statements constitute a complete and accurate disclosure of all the relevant facts, proposed transactions, and purpose of the proposed transactions and provided further that the proposed transactions are carried out as described above, and that there are no other transactions which may be relevant to the ruling requested, our ruling is as follows:
We confirm that the payment of membership dues to the Corporation will be deductible from the employee's income in accordance with subparagraph 8(1)(i)(iv), subject to the limitations in subsection 8(5) provided that the primary purpose of the Corporation is as stated in paragraph 5 above.
In our view, subsection 8(5) denies the deduction of, inter alia, dues levied for any other purpose not directly related to the primary purpose of the corporation. In addition, fees levied for professional development would not be deductible.
This ruling is given subject to the limitation and qualifications set out in Information Circular 70-6R3 dated December 31, 1996 and is binding on the Department providing XXXXXXXXXX.
Business and Publications Division
Income Tax Rulings and
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1997
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1997