Revenue Canada Taxation Head Office
F.B. Fontaine (613) 957-2140
XXXX
AUG 3 1988
Dear Sirs:
Re: Deductibility of Professional Membership Dues
This is in reply to your letter of March 31, 1988 requesting a "ruling" on the deductibility of membership dues paid to the XXXX We regret the delay in responding.
At the outset we advise that advance income tax rulings are issued by this Department only in respect of proposed transactions. Since the payment of membership fees to the Institute is already required, there is no proposed transaction and, accordingly, an advance income tax ruling would not be considered. Information Circular 70-6R and Special Release thereto (copies enclosed) discuss advance income tax rulings and you will also note that there is a charge for this service. The amount of the fees stated in these publications however, is no longer in effect: our current charge for work on such rulings is $65.00 per hour and a deposit of $325.00 must accompany the first submission. Although we cannot respond to your request by way of ruling, we offer our general comments on the subject in your letter.
It is your understanding that the professional status of members of the XXXX would be considered to be "recognized by statute" for the purposes of subparagraph 8(1)(i)(i) of the Income Tax Act (the "Act") based on the following evidence:
(1) Subsection 19(2) of the Expropriation Act of the Province of British Columbia (the "Expropriation Act") provides that "...The appraisal report shall be prepared by a person who has been accredited by an institute or body prescribed by the Lieutenant Governor in Council...".
(2) The Regulations to the Expropriation Act states: "For the purpose of section 19(2) of the (Expropriation) Act, the following persons may prepare appraisal reports:
(a) a person designated A.A.C.I. by the Appraisal Institute of Canada;
(b) a person designated as a Certified Appraiser R.I. (B.C.) by the Real Estate Institute of British Columbia;
(c) in respect of partial takings only, a person designated SR/WA by the International Right of Way Association".
While subsection 19(2) of the Expropriation Act and its Regulations as noted above provide a requirement that the relevant appraisal report be prepared by a member of the Institute or other specified organization, it is our view that this legislation does not accord any special recognition to the status of the profession of such a member. Additionally, we note that, under paragraph 9(e) of the Assessment Authority Act R.S.B.C. 1979 c. 22, the British Columbia Assessment Authority (the authority) has, for its purposes, the power:
"(e) to prescribe and maintain standards of education, training and technical or professional competence for assessors, appraisers and other persons employed or engaged in property assessment, and, to require compliance with those standards".
To our knowledge, however, the authority has not exercised its power under that provision. For these reasons, it is our opinion that the professional status of members of the Institute would not be considered to be "recognized by statute" for the purpose of subparagraph 8(1)(i)(i) of the Act, on the basis of the above- noted legislation.
Yours truly,
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch