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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
980154
XXXXXXXXXX B. Kerr
Attention: XXXXXXXXXX
March 11, 1998
Dear Sir:
Re: Advertising & Promotion costs related to a Corporate Golf Tournament
This is in response to your letter of January 20, 1998, wherein you requested our views on the deductibility of promotional expenses incurred by a corporation in respect of a golf tournament for clients, employees and other persons.
The corporation would incur promotional expenses such as t-shirts and golf balls with the company name and logo. These expenses are incurred to display the company name since persons other than clients and employees will attend the tournament. You have asked whether the promotional expenses would be disallowed under the provisions of subparagraph 18(1)(l)(i) of the Income Tax Act (the "Act").
Inter alia, subparagraph 18(1)(l)(i) of the Act denies the deduction of expenses incurred for the use of property that is a yacht, a camp, a lodge or a golf course or facility. In our view the cost of the promotional items would not be expenses incurred for the use of such properties. Accordingly, they would not be denied under the provisions of subparagraph 18(1)(l)(i) of the Act. They would, however, be subject to the general provisions of paragraph 18(1)(a) and section 67 of the Act that require expenses to be incurred for the purpose of producing income from a business or property and that they be reasonable in the circumstances. Of course the payment of green fees would be considered to be for the use of a golf course and thus fall within the provisions of subparagraph 18(1)(l)(i) of the Act.
We trust that these comments will be of assistance.
Yours truly,
P. Spice
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1998
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1998
Email this Content