Tax Forum
The Narrow View
FROM:
MARCH 1999 ISSUE | BY
DON GOODISON
In
Shane C. Gabie v. Her Majesty the Queen [97-2058(IT)I], heard in the Tax Court of Canada, Revenue Canada challenged Gabie’s claim for a tax credit, under section 122.3 of the
Income Tax Act, for his work as a software engineer outside Canada. In the Tax Department’s view, Gabie did not qualify for the tax credit because his work was not a qualifying activity as defined in the section, such as an "engineering activity." Gabie argued that his work did indeed fall under the category "engineering activity," which he said is not limited to work performed by professional engineers, but rather encompasses a whole range of work. He argued that software engineering is recognized worldwide as an engineering discipline with its own governing bodies and standards organizations. Since the
Act does not define "engineering activity," the Court concluded that it is not necessary to be a professional engineer to carry out an engineering activity. The Court concluded that software engineering was indeed an engineering activity and allowed the appeal. Although this case was heard at the informal procedure and does not establish precedent, taxpayers may still refer to it in defending future claims.
Don Goodison, CFP, FCGA, is a partner of Kemp Harvey Goodison, Certified General Accountants, in Burnaby, B.C. E-mail
goodison@axionet.com.