Training expenses claimed as capital expenses?

Forum|Forum|4 years ago
January 13, 2022
1 reply
5 views

Has anyone heard of training expenses for a startup small business being denied as they might qualify for capital expenses? If so, which class would they go under? Thank you.

ProFile (Canada)

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J

jrbooks

Level 4

You are correct in saying that some training courses are considered to be capital in nature. In essence, an expense for a course which enables one to maintain, update, or upgrade an existing skill or qualification required for one's business or profession are deductible; an expense for a training to acquire a new skill is capital in nature. The example given is that of a doctor who is a GP; training to be a specialist would be capital in nature, while training in the latest techniques used by GPs would be a normal deduction.

One source I have found says that this is an "eligible capital expenditure"; as of 1st January, 2017, that would be classified under Class 14.1at a rate of 5%.

Hope this helps.

Jo

E

emily3Author

Level 2

Thanks for the response Jo!

Are you able to link in the source where you found this information?

J

jrbooks

Level 4

I found the information on capital vs regular expense in the Wolters Kluwer "Preparing Your Income Tax Returns", which I purchase annually. Then I googled "Canada training courses as capital costs" and got this link which referred to the training as an eligible capital expenditure and gave me the CCA class:

https://www.montrealfinancial.ca/blog/guidelines-for-deducting-conference-and-training-expenses

Jo

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