According to the Income Tax Act, fines and penalties are not deductible for tax purposes.
This applies to tickets imposed by:
- Federal government
- Provincial government
- Municipal government
- A government agency
- Regulatory authority
- Or even a foreign country
This also applies if you receive a traffic ticket from the police department. It is a government agency and you cannot deduct it as a business expense. If you receive a parking ticket from the city, which is a local government, you cannot deduct it, either.
Tax tip of note! If you find yourself in a rush for a business meeting and you have to park somewhere, you may want to park on a private parking lot instead of the city’s property. If you do receive a parking ticket from the private parking lot owner, it is in fact deductible for tax purposes.