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.
980365
XXXXXXXXXX B. Kerr
Attention: XXXXXXXXXX
February 17, 1998
Dear Sirs:
Re: Entertainment Expenses at Golf Clubs
This is further to our letter of November 10, 1997, regarding the deductibility of entertainment expenses at a golf club.
As you are aware and as outlined in paragraph 4 of Interpretation Bulletin IT-148R3, the Department has interpreted the word "facility" in subparagraph 18(1)(l)(i) of the Income Tax Act (the "Act") as extending the words "golf course" to include any amenities provided by a golf club. As a result the cost of meals and beverages consumed at a golf club in conjunction with a game of golf or other recreational activity has been treated as being non-deductible under the provisions of subparagraph 18(1)(l)(i) of the Act.
We are pleased to inform you that the Department has reconsidered its interpretation of the word "facility" in relation to a golf course in subparagraph 18(1)(l)(i) of the Act. The Department will now consider that "facility" as used in that subparagraph should be interpreted in connection with the words "golf course" as to only include recreational amenities provided by a golf club. Accordingly, a "facility" will not include the dining room, banquet halls, conference rooms, beverage rooms or lounges of a golf club and thus the deduction of the cost of meals and beverages incurred at a golf club will not be denied under the provisions of subparagraph 18(1)(l)(i) of the Act. However, such costs will be subject to the provisions of paragraph 18(1)(a), section 67 and the limit imposed under subsection 67.1(1) of the Act. As a result, the tax treatment of meals and beverages at a golf club will parallel that of meals and beverages consumed at a restaurant. In administering this new position, the Department will require that meal and beverage expenses incurred at a golf club be clearly itemized. Therefore, an all inclusive charge that is not broken down will not be acceptable.
We trust that these comments clarify the Department's position regarding entertainment expenses at golf clubs and apologize for any inconvenience our previous letter may have caused.
Yours truly,
Bryan W. Dath
Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
.../cont'd
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