Principal Issues: Are expenses to achieve and maintain ISO9000 registration deductible in computing business income.
Position: Yes if incurred for the purpose of gaining or producing income from a business.
Reasons: 18(1)(a)
Signed on July 11, 2006
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your letter addressed to the Honourable James Flaherty, Minister of Finance, concerning whether the costs incurred by a business to achieve and maintain ISO 9000 registration are deductible for income tax purposes. I received a copy of your letter from Minister Flaherty's office on May 31, 2006.
The amount of an outlay or expense incurred by a taxpayer is usually deductible in computing the taxpayer's business income to the extent that the amount is incurred for the purpose of gaining or producing income from the business and is reasonable in the circumstances. I am therefore pleased to inform you that it has always been the CRA's view that the expenses to achieve and maintain ISO 9000 registration meet these requirements and are therefore deductible in computing business income.
I appreciate the opportunity to respond to your concerns.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Luisa A. Carpino, CA
(613) 832-3488
2006-019016