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GES Newsflash - Professional subscriptions

Revenue recently issued updated guidance in early January 2020 regarding circumstances in which membership fees paid to a professional body are tax deductible. Separately, Revenue also issued new guidance in early January (followed by a further clarification on 28th January) on deduction of expenses in employment which included comments on the cost of continuous professional development (CPD) courses.

Professional subscriptions


As a reminder, Revenue previously issued guidance on professional subscriptions. For a summary of the prior guidance, please see our prior newsflash here.

The new guidance that issued recently re-introduces some of the conditions which were not included in the 2018 guidance and provides additional examples and comments. 

The paragraphs below give an overview of the position and commentary on the updated Revenue guidance.

Updated Revenue guidance 

Since 2011, professional subscription fees are only deductible in cases where the fees are incurred “wholly, exclusively and necessarily” in the performance of the duties of employment. Revenue’s updated guidance sets out their view of the conditions to be satisfied in order for the “wholly, exclusively and necessarily” test to be met.

The qualifying situations outlined in the latest guidance are as follows:

(a) Where there is a statutory requirement for membership of a professional body or to hold a practicing certificate;
(b) Where statutory provisions restrict the ability of an individual to fulfil the duties of an employment;
(c) Where annual professional memberships are commercially necessary; or
(d) Where membership of the professional body is an indispensable condition of the tenure of the employment.

Situations (c) and (d) were not included in the 2018 guidance. While pre-2011, Revenue tended not to dispute situations (c) cases, it was not specifically mentioned in any previous guidance whereas situation (d) was in the original 2011 guidance.

In relation to situation (c), Revenue give examples of where commercial necessity would exist:

  • Where failure for employees to hold a professional membership or practicing certificate would invalidate the terms of the employer’s indemnity insurance policy.
  • Where failure to hold a professional membership or practicing certificate would prevent potential customers from entering into business contracts with the employer.

Where the employer or employee considers that an expense was commercially necessary, the employer or employee must be able to demonstrate that the employee would be unable to carry out his or her duties if he or she did not hold such professional membership or practicing certificate.

For situation (d) to exist, three conditions must be met:

  1. The duties of the employee and the employment require the exercise or practice of the relevant occupation or profession; 
  2. The employee actually exercises or practices the relevant occupation or profession; and
  3. Membership of the professional body is an indispensable condition of the tenure of the employment.

Revenue provide details of indicators that a professional membership/certificate is required to be held as part of the employee’s tenure of employments to include:

  • a requirement is included in the employment contract to hold such membership;
  • all staff in the same role are required to hold the particular membership or certificate;
  • the employee would be dismissed or transferred without such membership or certificate;
  • job advertisements for the role required the membership or certificate to be held.

More than one indicator should be met.

One of the examples provided by Revenue relates to an in-house accountant whose membership fee of an accountancy body was allowable as membership was an “indispensable condition of the tenure of her employment”. This example was included in the 2011 guidance, subsequently removed in 2018 guidance and now re-introduced in the latest guidance.

Two subscriptions

Revenue reiterate their view that generally, only one membership per employee may be provided tax-free where multiple memberships allow the employee to carry out the same or similar duties. The guidance does not address a situation where membership of two similar bodies might be required, e.g. to operate in two different jurisdictions. Where such cases arise, the individual circumstances should be considered.

CPD courses

Separately, Revenue issued guidance in early January that includes comments on the treatment of CPD course costs. Due to uncertainty raised following this guidance, Revenue clarified their position on 28th January.

Revenue have now confirmed that the cost of a CPD course which is relevant to the business of an employer is not regarded as a taxable benefit. A course is relevant to your business if it:

  • allows employees to gain knowledge necessary for their role or
  • helps employees perform their current or future work duties better.

Deloitte’s view

The relaxation of the Revenue position as to when a professional subscription fee qualifies for tax relief is welcome. The additional guidance and examples are also helpful.

The guidance on professional subscriptions that issued in 2018 created significant uncertainty and frustration for employers. A lot of employers view membership of appropriate professional bodies by certain employees as a necessity.

The guidance on CPD issued by Revenue caused unnecessary uncertainty for employers and the latest clarification from Revenue is also welcome.

Employers should review their existing policies and procedures regarding the payment of fees to professional bodies and CPD courses on behalf of employees and make any necessary amendments in order to ensure that the above mentioned exemptions apply.

Please contact a member of your GES Client Service Team should you wish to discuss this area further.

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