Important Tax Tips for APGO Members

Oscar Torres, CPA, CA, LPA of Bateman MacKay LLP


Deducting amounts paid to the APGO in your tax return

The way in which expenses are deducted for tax purposes is related to whether a person is an employee, a self-employed individual or an incorporated business.

Employees are very limited in the expenses they can deduct when calculating the tax that is owed to the Canada Revenue Agency (CRA).

Self-employed individuals as well as incorporated businesses have much more flexibility. They can deduct any reasonable expenses incurred to earn income from their businesses.

The different expenses paid to the APGO and their deductibility has been categorized below.


Under the Canadian Income Tax Act (“ITA”), employees can only deduct expenses that are specifically allowed. Except for expenses such as professional fees, union dues and pension contributions, a basic test must be met before an employee can deduct expenses. The employee must be required by the employment contract to pay his/her own expenses. The employer will therefore have to issue form T2200 - Declaration of Conditions of Employment, certifying that the employee does indeed pay for these expenses. Employers are usually willing to provide this form, as it helps their employees with their tax situation provided the employee can demonstrate and evidence that he/she have incurred expenses for employment purposes. 

Fees and deductibility

·         Annual membership dues: If the employer does not pay for these fees, they can be deducted as an employment expense in the employee’s tax return. Conversely, if employer pays for the fees or reimburses the employee, then the employee cannot deduct the amount on his/her tax return.  Note that the employee will not be taxed on this benefit as long as it was deemed necessary or required that he/she incur the expense to maintain his/her professional status for their job which is likely. Note that fees paid by the employer on behalf of the employee may be reported as taxable benefit on an employee’s T4. A taxable benefit will only arise if it is determined that the amount is not primarily to the employer’s benefit. 


·         Application Fees and CPD courses: The ITA generally does not provide for an employee to deduct training expenses. However, if these expenses are incurred as part of the conditions of employment, and form T2200 is obtained, these costs can be deducted in the employee’s tax return.  Similarly, if the employer pays for the fees and training courses, then no deduction is allowed by the employee for tax purposes. However if these courses are strictly for the benefit of the employee and not the employer, a taxable benefit may result on the employee’s T4. This will occur if for instance a geoscientist that is not practicing and works for a completely unrelated field has his/her training courses paid by the employer.  If there is no benefit to the employer for the employee to keep up with his/her training, then a benefit will have been created.

Self – Employed Individuals

Under the ITA, self-employed individuals can deduct any reasonable expenses incurred to earn income from their businesses. This entails that all fees related to annual membership dues, application fees and CPD courses can be deducted as reasonable business expenses. The remaining net income (earnings or billings less all reasonable expenses) will therefore be used to calculate income taxes for the year. Self employed individuals are required to keep track of their business income and expenses and submit their tax returns by June 15th of the following year in connection with the calendar year and taxation year just completed. 

Incorporated Businesses (Corporations)

Corporations are also allowed to deduct any reasonable expenses incurred to earn income. A corporation will therefore be able to deduct all business expenses related to paying for an employee’s membership dues and training costs.

As discussed above a corporation will have to issue a T4 and a taxable benefit in such instances in which the employee benefits from the training and not the employer.

Note that corporations will issue T4s to its employees.  In a situation in which a person decides to incorporate his/her previous self-employment business there are various tax planning opportunities in order to reduce the tax burden and increase income capitalization. Please contact your financial advisor for additional information.

Corporations are required to keep track of their taxable income and expenses and file their tax returns six months after their fiscal year end.

In general, employees have very limited tax deduction opportunities, but with careful planning, tax savings can be maximized.  Self-employed individuals and corporations have more flexibility, and sometimes there is an important decision as to whether to incorporate your self-employed business or continue on status quo. For additional information on tax planning opportunities, please contact a Bateman Mackay advisor.

Oscar Torres, CPA, CA, LPA

Bateman MacKay LLP


Copyright 2013, Association of Professional Geoscientists of Ontario (APGO)