13 July 1992 Income Tax Severed Letter 9212665 - Employee Deduction - GST on Professional Membership Dues

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.

Revenue Canada,
Customs and Excise
General Tax Policy 921266
Goods and Services Tax A. Humenuk
Ottawa, Ontario (613) 957-2134
K1A 0L5

Attention: Mr. H.L. Jones, Director

July 13, 1992

Dear Sirs:

Re: Interrelation of subparagraph 8(1)(i)(i) of the
Income Tax Act with section 253 of the Excise Tax Act.

We are replying to your letter of April 22, 1992 in which you ask whether the GST paid on professional membership dues is deductible to an employee under paragraph 8(1)(i) of the Income Tax Act (ITA). We apologize for the delay in our response.

It is your understanding that where an amount is deductible under section 8 of the ITA as annual professional membership dues, the amount so deducted would not include any GST which may be payable thereon. The amount deductible as professional dues for income tax purposes has relevance in the administration of the Excise Tax Act (ETA) since an individual who is an employee of a registrant for GST

Document Disclosed Pursuant to The Access To Information Act Document Divulgué en vertu de la loi sur l'accès à l'information

purposes may also be eligible for a rebate of the GST paid on such dues equal to 7/107ths of the amount which was deducted under section 8 of the ITA in computing the employee's income from employment. You point out that if your understanding is correct and the amount deductible under paragraph 8(1)(i) of the ITA does not include the GST paid on the dues, the employee will not be eligible for a full rebate of the amount of GST paid on the dues because of the mathematical calculations involved.

You may recall that we provided you with an opinion on February 19, 1991 with respect to a very similar issue, wherein we stated that the amount eligible for the tuition tax credit under section 118.5 of the ITA would not include any GST that may have been payable in respect of the related tuition fees. In both cases, the issue involves the interpretation of what is included as "fees" or "dues" respectively.

After consultation with officials from the Department of Finance, we are now prepared to take a wider view and allow the deduction of the GST paid on annual professional dues from employment income under 8(1)(i)(i) of the ITA, provided that the employee is otherwise entitled to the deduction, and to include the amount of GST paid on tuition fees which are eligible for the tuition tax credit in the calculation thereof.

As a final note, we should mention that, where the employee receives a rebate under section 253 of the ETA, the amount of the rebate will be included in the employee's income in the year it is received under subsection 6(8) of the ITA.

We trust our comments will be of assistance to you.

Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch

• c. c. Current Amendments & Regulations Division

Document Disclosed Pursuant to The Access To Information Act Document Divulgué en vertu de la loi sur l'accès à l'information