17 January 2003 Internal T.I. 2002-0143427 - TRAVEL EXPENSES

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues:

Meaning of the wording "travel expenses incurred by the taxpayer while away from home in the course of carrying on the taxpayer's business" as used in section 18(1)(h) of the Act in a situation of a self-employed contractor.

Position: General comments given

Reasons: Ordinary meaning of the words.

		January 17, 2003

	INTERIOR B.C. TSO	HEADQUARTERS
	Audit Services Section	Cornelis Rystenbil, CGA
(613) 941-6547
	Attention:  Jim Chorney
		2002-014342

Travel expenses incurred while away from home

This is in reply to your correspondence of May 28, 2002 in which you ask for clarification as to the meaning of the wording "travel expenses incurred by the taxpayer while away from home in the course of carrying on the taxpayer's business" as used in section 18(1)(h) of the Income Tax Act (the "Act"). More specifically, you have asked whether meals consumed by a self-employed contractor while on a job-site would be deductible and whether accommodation and meal expenses incurred by a self-employed contractor while working for 8 months at a job site 400 kilometers away from his place of business/residence would be deductible.

Our Comments

The Act and Income Tax Regulations do not provide a definition of "travel expenses". Since the words are not defined in the Act, reference must be made to their ordinary meaning. The Canadian Oxford Dictionary defines travel as to "go from one place to another". In our view, travel expenses would be expenses normally incurred while travelling from one place to another including food and accommodation.

The phrase "while away from home" in paragraph 18(1)(h) is not defined in the Act and thus should also be interpreted in its ordinary sense. Accordingly, it refers to a period when one is away from the place where one lives. However, in understanding paragraph 18(1)(h), it is important to consider the entire phrase "while away from home in the course of carrying on the taxpayer's business". This means that travel expenses incurred by a businessperson travelling to and from his or her home to the business location (or one of the business locations) are not deductible business expenses, since they are not incurred in the course of carrying on the taxpayer's business. If the taxpayer's place of business is carried on at the taxpayer's residence, travel expenses incurred to travel to the various job sites may be deductible, subject to sections 67 and 67.1 of the Act. It is a question of fact whether the taxpayer's residence is a place of business and whether the expenses were incurred while away from his home in the course of carrying on his business.

As the remainder of your questions relate to questions that are of a technical application nature, we have forwarded your request to Ms. Anne Wilson, Manager, Corporate Section of the Technical Application and Valuations Division of the Compliance Programs Branch for her action. She may be reached at (613) 957-2160.

For your information, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Customs and Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the electronic library version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Mrs. Jackie Page at (613) 994-2898. A copy will be sent to you for delivery to the client.

Mickey Sarazin, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

c.c. Anne Wilson

Audit Directorate - HQ