27 August 1990 Administrative Letter 900646 F - Deductibility of Advertising Expenses in a Magazine

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.

Attention: 19(1)

August 27, 1990

Dear Sirs:

This is in reply to your letter of May 3, 1990, wherein you requested our opinion on the deductibility of the advertising expenses in a magazine.

You understand that publications which meet the following criteria will satisfy the conditions for deductibility:

1)     produced regularly not less than 4 times per year,

2)     bearing date of issue,

3)     containing articles of general interest, and

4)     are Canadian owned

You ask if a periodical printed in the United States will satisfy the conditions to enable a Canadian advertiser to deduct the cost of an advertisement for income tax purposes.

Our Comments

Section 19 of the Income Tax Act (the "Act") lays down the requirements for the deductibility of such advertising expenses. This section of the Act has been recently amended to allow the printing and/or setting of a Canadian periodical to be done in the U.S.A.  Therefore, provided the magazine meets the other requirements of section 19 of the Act, the printing in the U.S.A. would not by itself cause the advertising therein to be non-deductible.  It is a question of fact as to whether these other requirements are met at a particular time. To assist you on this, we have enclosed a copy of the section 19 of the Act for your perusal.

The above comments do not constitute an advance income tax ruling, and as such, are not binding upon Revenue Canada, Taxation.

Yours truly,

for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch