Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Paragraph 67.1(2)(f) of the Act sets out an exemption for food, beverages, or entertainment generally available to all employees at a "place of business of a person", to such expenses incurred in respect of "6 or fewer special events" held in a calendar year.
Does the phrase "6 or fewer special events" relate to each place of business of the person?
Position: Yes
Reasons: The position is consistent with the wording of the Act and the explanatory notes issued by the Department of Finance.
XXXXXXXXXX 2000-003263
M. Eisner
Attention: XXXXXXXXXX
August 3, 2000
Dear Sir:
Re: Deduction - Food Beverages and Entertainment
This is in reply to your letter of June 16, 2000, concerning the above-noted subject.
Subsection 67.1(1) of the Income Tax Act (the "Act") sets out the general rule that costs in respect of the human consumption of food or beverages, or the enjoyment of entertainment are deemed to be 50% of the lesser of (i) the amount actually paid or payable in respect of these items; and (ii) an amount that would be reasonable in the circumstances to pay for them. Paragraph 67.1(2)(f) of the Act sets out an exemption for food, beverages, or entertainment generally available to all employees at a place of business of a person, to such expenses incurred in respect of six or fewer special events held in a calendar year.
With respect to paragraph 67.1(2)(f) of the Act, we agree with your view that each separate place of business (e.g., Vancouver, Toronto, Ottawa, Montreal, and Halifax) is a "place of business" of the person. In such a case, all five business locations are entitled to have up to six separate special events, provided the conditions are otherwise met.
We trust that our comments are of assistance to you.
Yours truly,
John Oulton
for Director
Business and Publications Division
Income Tax Rulings
Policy and Legislation Branch
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