| 19(1) | File No. 5-9480 |
| G. Ozols | |
| (613) 957-2139 |
Dear Sirs:
Re: Moving Expenses
Your letter of October 4, 1989 to the Sudbury Taxation Centre has been referred to us for reply. You have inquired whether moving expenses may be claimed as a deduction under the Income Tax Act (the "Act") in the following circumstances.
As we understand it 24(1)
As a preliminary matter, any otherwise qualifying moving expenses for which the taxpayer receives reimbursement cannot be claimed by him as a deduction unless the reimbursement is included in income. In addition, depending on the type of expenses reimbursed, the reimbursement may or may not be a taxable benefit to the taxpayer. We enclose copies of Interpretation Bulletin IT-470R and The 1989 Employers and Trustees Guide and refer you to paragraphs 35 to 38 of IT-470R and pages 50 to 52 of the Guide.
Moving expenses which are not reimbursed by an employer, or where the reimbursement is included in the employee's income, are deductible if the requirements of section 62 of the Act are met. Paragraph 62(1)(a) of the Act requires that the taxpayer commenced"...to be employed at a location in Canada...". 24(1)
24(1) The only situation in which a taxpayer may deduct moving expenses to take up employment outside of Canada is where the taxpayer has moved outside of Canada but is deemed by section 250 of the Act to be resident in Canada. This exception is specifically provided for in section 63.1 of the Act and does not apply to the facts in this case.
While we appreciate the taxpayer's position, the Act is very specific in this regard and does not allow for any discretion by the Department. We trust the above will assist you in understanding our position.
Yours truly,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch