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.
Head Office - Appeals Branch Business and General Appeals & Referrals Division Division
Attention: Neil Wilson
XXXXXXXXXX Transport Employee Expense - Paragraph 8(1)(g)
This is in reply to your memorandum of August 4, 1993 in which you requested our views on the deductibility of meal expenses under paragraph 8(1)(g) of the Income Tax Act (the Act) in respect of an individual who is employed by placement agencies and assigned to trucking firms.
XXXXXXXXXX
XXXXXXXXXX
Paragraph 8(1)(g) of the Act is restricted in its application to an individual who is an employee of a person whose principal business is the transportation of passengers and/or goods. The principal business of a placement agency is not the transportation of passengers and/or goods but rather the supply of human resources to clients in need of temporary manpower assistance.
We have, in the past, been asked to consider whether truck drivers whose duties parallel those driving for transport companies but whose employers' principal business happened to be the manufacture of goods rather than their transportation would be entitled to a claim under paragraph 8(1)(g) of the Act. Our responses have confirmed that despite the similarity in their duties the wording of the provision compels us to consider the principal business of the individual's employer in determining the driver's entitlement to a claim under paragraph 8(1)(g) of the Act. Unfortunately, the taxpayer's argument that "a truck driver is a truck driver" is given secondary consideration in these circumstances.
In this regard, the Department's position is supported by the tax tribunals, most recently by the Tax Court of Canada in George E. Waugh et al v. MNR 90 DTC 1117 in which the Court cited the reasons given in The Queen v. Creamer 76 DTC 6422. In Waugh the Court stated that
"Finally, I believe that it is clear from The Queen v. Creamer, 76 DTC 6422 (F.C.T.D.) that the proper approach in applying paragraph 8(1)(g) of the Act is first to ascertain the legal entity that employed the taxpayer during the relevant period and then to answer the question of whether the principal business of that entity was passenger, goods, or passenger and goods transport at that time".
Consequently, based on the information contained in the attached file, we must concur with the assessment of XXXXXXXXXX 1991 return denying the claim for meal expenses under paragraph 8(1)(g) of the Act.
M.A.G. Hiltz A/Director GeneralRulings DirectorateLegislative and Intergovernmental Affairs Branch
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