Dáil Éireann Debate, Thursday - 2 December 2004
177 Mr. Carey asked the Minister for Finance if he will examine the provision in the Taxes Consolidation Act 1997 in relation to the payment of professional fees and the way in which it applies to academics who are professionally qualified as indicated in correspondence (details supplied); and if he will make a statement on the matter. [31934/04]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the Taxes Consolidation Act 1997 does not give a specific tax deduction in respect of the payment by an individual of her or his annual membership fee to a professional body. However, under the provisions of section 114 Taxes Consolidation Act 1997, an employee or office holder may claim a tax deduction in respect of expenses incurred wholly, exclusively and necessarily by her or him in the performance of the duties of her or his employment or office.
The Revenue Commissioners have informed me the payment by an individual of a fee to maintain her or his professional qualifications need not mean the expense has been incurred wholly, exclusively and necessarily in the performance of the duties of the employment or office and, therefore, deductible under section 114. Each case is examined on its merits and the facts and circumstances of such cases will determine whether or not the expense may be claimed as a deduction under section 114.
A deduction under section 114 will be due where annual membership fees of a professional body are paid by the employee and he or she must be a member of such body in order to perform the duties of his or her office or employment. For example, an accountant who must be a member of a professional body to be authorised to certify accounts would be entitled to a tax deduction in respect of the relevant membership fee.
Under the provisions of section 118-5E Taxes Consolidation Act 1997, the payment, or reimbursement, by an employer of an employee's or director's annual membership fee to a professional body does not give rise to a tax liability in the hands of the employee or director where such membership is relevant to the business of the employer. The law distinguishes these situations because the employer is bearing the cost. Membership of a professional body may be regarded as relevant to the business of the employer where it is necessary for the performance of the duties of the relevant director or employee or it facilitates the acquisition of knowledge which is necessary for or directly related to the performance of the duties of the office or employment of the director or employee.
While I have noted the points made in the correspondence referred to by the Deputy any broadening of the definition of deductible expenses would have wider implications for the treatment of employment expenses generally in the income tax system.
