Principal Issues: Whether civilian members of the RCMP are entitled to the deduction in 110(1)(f)(v)?
Position: No
Reasons: Legislation restricts the deduction to members of the Canadian Forces and police officers.
Gary Lutwick, Sgt. Research and Development Coordinator International Peacekeeping Branch 2006-021522 RCMP HQ S.E. Thomson 1200 Vanier Parkway Ottawa ON K1A 0R2
November 23, 2006
Dear Sgt. Lutwick:
Re: Deduction for High-Risk Missions
This is in reply to your email to Yves Gingras of the Department of Finance on November 1, 2006. In your email you ask whether a civilian member of the RCMP deployed on a high-risk mission is entitled to the deduction under subparagraph 110(1)(f)(v) of the Income Tax Act. Subparagraph 110(1)(f)(v) reads as follows:
110 (1) For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted such of the following amounts as are applicable:
...
(f) ... any amount that is
...
(v) the lesser of
(A) the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on
(I) a deployed operational mission (as determined by the Department of National Defence) that is assessed for risk allowance at level 3 or higher (as determined by the Department of National Defence),
(II) a prescribed mission that is assessed for risk allowance at level 2 (as determined by the Department of National Defence), or
(III) any other mission that is prescribed, and
(B) the employment income that would have been so earned by the taxpayer if the taxpayer had been paid at the maximum rate of pay that applied, from time to time during the mission, to a non-commissioned member of the Canadian Forces;
to the extent that it is included in computing the taxpayer's income for the year;
The deduction is restricted to members of the Canadian Forces and police officers. Therefore, in order to qualify, a member of the RCMP must be an "officer" as defined in the Royal Canadian Mounted Police Act. That is, a civilian member of the RCMP would not be eligible.
We realize that the Department of Finance Explanatory Notes to subparagraph 110(1)(f)(v) refer to "members of a police force". However, we are bound by the wording of the legislation in the Income Tax Act that was passed by Parliament, and must restrict the application of the provision to police "officers". We understand that this interpretation was the intention when the provision was enacted.
We trust that we have been of assistance.
Yours truly,
Olli Laurikainen, Manager
For Director
International & Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch