Principal Issues: In several examples where a trucking company pays for the meals of truck drivers who travel on in-town and out-of-town trips, whether the employees are required to include the value of the meals in income as a taxable benefit under paragraph 6(1)(a) of the Act and whether the employer's deduction is restricted under subsection 67.1(1).
Position: (A) On in-town trips there is a taxable benefit to the employees and the employer's deduction is not restricted. (B) On out-of-town trips there is no taxable benefit to the employees and the employer's deduction is restricted.
Reasons: (A) On in-town trips, the employer is paying for the meal expenses of employees who are not traveling away from the municipality and the metropolitan area where the employer's establishment is located at which they ordinarily report to work. Consequently, the employees are in receipt of a taxable benefit under paragraph 6(1)(a) of the Act for the value of the meals. Because the employees are required to include the value of the meals in their income under section 6 of the Act, the exception in paragraph 67.1(2)(d) applies and therefore, subsection 67.1(1) will not restrict the employer's deduction. (B) On out-of-town trips, the employees are not in receipt of a taxable benefit. The amounts received or benefits enjoyed by the employees in respect of the employer-provided meals are not required to be included in computing their income under paragraph 6(1)(a) of the Act because the expenses are incurred while they are travelling in the course of employment away from the municipality and the metropolitan area where the employer's establishment is located at which they ordinarily reported to work. The employer's deduction is restricted under subsection 67.1(1) of the Act to 50% of the amount paid. The exceptions in paragraphs 67.1(2)(d) and (e) of the Act are not applicable. For these exceptions to apply, the meals paid for by the employer would have to be excluded from the employees' income because of the special work site or remote work location exclusion in subsection 6(6) of the Act. The meals are not excluded from the employees' income because of subsection 6(6) of the Act, but are excluded based on what constitutes a benefit for purposes of paragraph 6(1)(a).