In Home Office Rules

JUL 11, 2017


Written by: Evelyn Suvajdzic

This is an article from my March Tax Mentor Monthly Tax Webinar regarding what constitutes a “meeting” by CRA.

 

TI2013-0481171E5 - 2013/12/10 - Business and Employment Division of the Rulings Directorate

In this Technical Interpretation, CRA is asked to reconsider its view on what it considers acceptable as a "meeting" for the work space at home deduction. The taxpayer cites changes in technology, including the use of e-mail, telephone and skype. Paragraph 8(13)(a) of the Tax Act states:

"(a) no amount is deductible in computing an individual’s income for a taxation year from an office or employment in respect of any part (in this subsection referred to as the “work space”) of a self-contained domestic establishment in which the individual resides, except to the extent that the work space is either

(i) the place where the individual principally performs the duties of the office or employment, or

(ii) used exclusively during the period in respect of which the amount relates for the purpose of earning income from the office or employment and used on a regular and continuous basis for meeting customers or other persons in the ordinary course of performing the duties of the office or employment;

 

As the phrase "meeting customers" is not defined in the Tax Act, CRA states that they must rely on case law and the ordinary meaning of the words. CRA references the definition of "meeting" in the Oxford Canadian dictionary and concludes that a meeting is restricted to "face to face encounters”.

Case law on the subject has concluded that meetings conducted by way of telephone are sufficient to meet the requirements for the work space at home deduction. The court in Vanka v. R., [2001] 4 C.T.C. 2832 (T.C.C. [Informal Procedure]) accepted that a medical doctor was meeting his patients within the meaning of s.18(12)(a)(ii) of the Tax Act by making himself available to answer their queries by telephone. The court in Landry v. R., 2007 CarswellNat 2077, 2007 TCC 383, [2007] 5 C.T.C. 2633, 2007 D.T.C. 1396 (Eng.) (Tax Court of Canada [Informal Procedure]) concluded that the meetings by telephone in Vanka, sufficient for the purposes of s.18(12)(a)(ii), is indistinguishable from s.8(13)(a)(ii) in relation to the requirement that the work space be used on a regular and continuous basis for meetings.

While the courts have weighed in on the matter and provided their interpretation, CRA continues to maintain their position that a "meeting" must be face to face, stating that informal decisions of the Tax Court have no precedent value.

Perhaps common sense will eventually prevail.