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Tax Tips - January 8, 2001

Meal & Entertainment Expense Deduction
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Meal or entertainment expense for the purpose of business is deductible, but generally limited to 50% of the actual cost, subject to what Canada Customs and Revenue Agency would consider reasonable.

However, there are exceptions to this limit for work done at certain sites.

If a site is at least 30 kilometres from the boundary of the nearest urban area that has a population of at least 40,000 people, 100% of the meal and entertainment expenses incurred for duties at the site can be deducted as long as all the following conditions are met:

	The expenses are not paid or payable for a conference, convention, seminar, or similar event.
	The expenses are for an employee's business-purpose meals and entertainment expenses incurred at the work site.
	The period of work at the site is temporary.
	The employee must maintain a principal place of residence which was available for occupancy and was not rented by the employee to any other person.
	Because of the distance, the employee could not reasonably be expected to return daily from the site to his or her principal residence.