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Shareholder-Employee Auto + Other Expenses

This post has to do with Shareholder-Employees deducting work related expenses on their T1 Personal Income Tax Return

When can shareholder-employees deduct expenses?
August 2019

Until now, there has been some confusion over tax claims for auto and other work-related costs of shareholder employees, as our Tax Blog highlighted. CPA Canada raised the issue with the Canada Revenue Agency (CRA), and the CRA developed draft guidance with our input to clarify how these rules apply.

The CRA’s guidance is now finalized. In a ​stakeholder email that the CRA asked us to share with our members, the CRA explains how shareholder-employees who meet two key conditions may be allowed to deduct employment expenses.

https://www.cpacanada.ca/en/business-and-accounting-resources/taxation/corporate-tax/publications/tax-resources-for-cpas?sc_camp=2B7FEA8921654C33B40CFBF0A25EE6C5%20

https://www.cpacanada.ca/en/business-and-accounting-resources/taxation/blog/2018/may/cra-reverses-shareholders-employment-expense-reassessments

Click on this link to obtain the CRA finalized download

stakeholder email

This, of course is largely public relations pap. Any practitioner knows this. If they don’t – they shouldn’t be practicing tax. None of this has changed substantially for many years. There are loads of tax cases of qua employee vs qua shareholder of all sorts.