Principal Issues: Can a clergyperson of a foreign church that has no status in Canada within its religious denomination claim the clergy housing deduction?
Position: No
Reasons: Must have authority and be recognized as a minister under its own denomination
XXXXXXXXXX 2004-008007 C. Tremblay, CMA (613) 957-2139 June 30, 2004
Dear XXXXXXXXXX,
This is in reply to your letter of June 3, 2004, concerning an international affiliate of your organization, which has no status in Canada, and which is attempting to give clergy status to people in Canada. It is your understanding that if a foreign church denomination has no status in Canada, then the clergy who are attempting to act under its authority will have no status in Canada and are therefore ineligible for the clergy housing tax deduction. You seek our confirmation.
Our Comments:
Paragraph 8(1)(c) of the Income Tax Act (the "Act") allows certain members of the clergy or of religious orders, as well as certain regular ministers of religious denominations, to deduct an amount in respect of their living accommodation. Paragraph 3 of Interpretation Bulletin IT-141R (Consolidated) states that whether a person is a "member of the clergy" or a "regular minister" depends upon the structure and practices of the particular church or religious denomination. It is also our position that the individual should be formally appointed or recognized by a legitimate authority to appoint or ordain ministers on behalf or within the denomination. If a foreign church denomination has no status in Canada, in our view, it does not have that authority. Accordingly, if a person is not authorized by the proper authority within a particular denomination to perform most of the duties of a regular minister, that person will not be allowed a deduction under paragraph 8(1)(c) of the Act.
We trust our comments are of assistance.
Steve Tevlin
For Director
Financial Industries Division
Income Tax Ruling Directorate
Policy and Planning Branch