30 March 1999 Internal T.I. 9907237 - MEALS FOR SELF-EMPLOYED TRUCKER.

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.

Principal Issues: Whether the meal expense for a self-employed trucker is subject to the 50% rule in 67.1.

Position: Yes.

Reasons: Section 67.1 applies for all purposes of the Act except sections 62, 63, and 118.2.

      Client Services Directorate   HEADQUARTERS
      Assessment and Collections Branch   J. Gibbons
            957-8953
      Attention:  John Shearer
            7-990723

Deductibility of Meals for Self-Employed Truckers

This is in response to your memorandum of March 17, 1999, concerning the application of the 50% rule in section 67.1 of the Income Tax Act to the cost of meals incurred by self-employed truckers. You seek our comments on whether the 50% rule in section 67.1 applies to the self-employed trucker, as it does to the trucker who is an employee and who incurs meal costs while travelling away from the municipality and metropolitan area where his or her work establishment is located.

Since section 67.1 applies for all purposes of the Act (other than sections 62, 63 and 118.2), it is our view that, in computing income from a trucking business, the self-employed trucker would be restricted to a deduction of 50% of the cost of those meals which qualify as business expenses. In order to qualify as a business expense, an expense must be made or incurred by the taxpayer for the purpose of gaining or producing income from a business (paragraph 18(1)(a)) and the amount of the expense must be reasonable in the circumstances (section 67). Further, paragraph 18(1)(h) denies a deduction for personal or living expenses other than travel expenses incurred by the taxpayer while away from home in the course of carrying on the taxpayer’s business.

Roy C. Shultis
Director General
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch