“Annual” requirement
1.4 … In order to be considered annual, dues must be of a recurring nature (that is, not a once and for all fee or charge paid on becoming a member). As a result, a payment for an initiation or entrance fee, special assessment, or other amount that is generally considered to be of a non-recurring nature will not be an annual membership due for purposes of subparagraph 8(1)(i)(i).
1.5 Other payments that will not be considered annual membership dues eligible for deduction under subparagraph 8(1)(i)(i) include:
- examination fees
- tuition or training costs including costs to obtain continuing professional education credits
- licence fees
- dues paid by students before becoming members of a professional organization …
Meaning of professional status
1.6 … [A]n employee would likely have a professional status where they possess advanced education or training, and satisfy other conditions and requirements established by a professional organization. ...
Meaning of recognized by statute
1.7 … Note that the status in question is that of the employee and not that of the organization or association. … Montgomery … clarified that the phrase “recognized by statute” should be afforded a broad interpretation, and that “recognized by statute” does not necessarily mean that a professional status was incorporated, created, or regulated by a particular statute. ...
1.8 The term statute is generally defined to mean a law or act that is passed by a legislative body. As such, an employee’s professional status is recognized by statute where it is recognized by any federal, provincial, territorial, or foreign statute, including:
- the statute (or supporting regulations) that created or regulates the professional organization;
- any other statute (or supporting regulations) that acknowledges the existence, validity, or character of the professional status. …
1.10 In determining whether an employee’s professional status is recognized by statute, consider the following:
- A professional status will be recognized by statute if a statute or its regulations require that certain services be performed only by a member of a particular professional organization, even if the organization itself is not regulated by statute. …
- An employee’s professional status does not necessarily have to be recognized by statute in the jurisdiction of employment. For example, an employee who resides and works in Alberta may belong to an association in Australia where the professional status of the employee is recognized by statute. …
Dues necessary to maintain a professional status
1.11 To qualify for deduction under subparagraph 8(1)(i)(i), the payment of annual professional membership dues must be necessary to maintain a professional status recognized by statute. It is the CRA’s view that the payment of dues will likely be considered necessary to maintain a professional status only where:
- membership in the professional organization is mandatory (that is, is not voluntary) in order to maintain professional status; and
- the non-payment of annual professional membership dues would adversely affect or cause the employee to lose their professional status.
1.12 If membership in a given association does not affect professional status (for example, membership in the Canadian Medical Association for physicians), the annual dues paid to that association will not qualify for deduction under subparagraph 8(1)(i)(i). …[A]n employee may be entitled to claim the annual dues paid to more than one professional organization. For example, a physician may belong to the College of Physicians and Surgeons in two provinces.
1.13 In some instances, a provincial organization may require payment of annual dues that are, in part, passed on to a national association. Where membership in that provincial organization is necessary to maintain an employee’s professional status, the entire amount of annual dues paid will be considered necessary to maintain professional status. This will be the case even though direct membership in the national association by the employee will not affect the employee’s professional status.
1.14 An employee may work in a province or territory that does not have legislation that recognizes their professional status. Therefore, it may be necessary for the employee to belong to an organization in another province in order to maintain professional recognition outside their province of residence. In such cases, the annual dues paid to that organization may be deductible … .
1.15 An employee cannot generally deduct the annual dues paid to both a national and provincial organization, unless it is essential for the employee to belong to both organizations in order to maintain their professional status. …
Dues must reasonably relate to employment income
1.16 In determining whether professional membership dues reasonably relate to the employment income source … it is not necessary that the payment of annual dues be essential for the employee to hold their position or job. However, there must be a reasonable connection between the professional membership and the position or job held by the employee [e.g., per Example 2, maintaining professional status as a chemical engineer at a chemicals company, cf. an architect working as the president of a clothing manufacturer.]
