19 October 1989 Ruling 58453 F - Meals and Lodging 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.

October 19, 1989

Dear Sirs:

Re:  Paragraph 18(1)(h) of the Income Tax Act (the "Act")

This is in reply to your letter of July 28, 1989, wherein you requested our opinion with respect to the amendment of paragraph 18(1)(h) of the Act deleting the phrase contained in the former provision "(including the entire amount expended for meals and lodging)".

Specifically, you have asked whether the Department would continue to include the lessor amount expended for meals and lodging (as a result of the introduction of section 67.1 of the Act) in the interpretation of "travelling expenses" or if the Department would take a more restrictive view as to what qualifies as "travelling expenses".

We advise that, as noted in your letter, the explanatory notes accompanying Bill C-139 indicated the deletion of the phrase was "...as a consequence of the general restriction provided in section 67.1 on the deductibility of meal expenses to 80% of their cost" and, accordingly, it is our view that meals and lodgings will continue to be included in the interpretation of "travelling expenses" subject to the other restrictions in the Act on the deductibility of such expenses.

We also point out that paragraph 8(1)(h) of the Act contains a similar provision for the deduction of travelling expenses in the performance of employment duties.  You will note that the paragraph makes no mention of meals and lodging yet subsection 8(4) of the Act restricts the deductibility of expenses for meals under paragraph 8(1)(h) of the Act and the 1988 Employment Expenses Tax Guide discusses the extent to which meals and lodging are so deductible.

We trust our comment are of assistance.

Yours truly,

for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch