18 July 2012 External T.I. 2012-0438721E5 - Deductibility of 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.

Principal Issues: Are membership fees paid to a particular organization deductible pursuant to subparagraph 8(1)(i)(i) of the Act?

Position: No

Reasons: Membership fees in the particular organization are not for the maintenance of a professional status recognized by statute.

XXXXXXXXXX
															2012-043872
															N. Pulandiran
July 18, 2012

Dear XXXXXXXXXX:

Re: Deductibility of annual membership fees

This is in response to your letter of March 1, 2012, asking whether annual membership fees paid to the XXXXXXXXXX (“Organization”) are deductible in computing income from employment.

Under subparagraph 8(1)(i)(i) of the Income Tax Act, a deduction in computing income from an office or employment is allowed for annual professional membership dues paid to maintain a professional status recognized by statute. Although we confirmed that there is a provincial statute that sets out standards to ensure the safety of XXXXXXXXXX, there appears to be no regulations which prescribe minimum age, qualifications, and training for XXXXXXXXXX. Unlike the facts in Montgomery et al v The Queen (“Montgomery”), no statute appears to recognize individuals who are members of the Organization to be qualified XXXXXXXXXX. In Montgomery, the Federal Court of Appeal allowed the deduction of membership fees for the Appraisal Institute of Canada because three statutes recognized an individual who held a certificate from that institute as a person experienced in the making of appraisals of real property.

Given the foregoing, it is our view that membership dues paid to the Organization do not qualify for a deduction from employment income under subparagraph 8(1)(i)(i) of the Act as the dues are not paid to maintain a professional status recognized by statute.

We trust our comments will be of assistance to you.

Yours truly,

Nerill Thomas-Wilkinson
Manager
for Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch