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: Is 50% of the cost of the personal consumption of a food supplement that is sold by the taxpayer a reasonable and deductible expense for purposes of the Income Tax Act (the Act).
Position: No.
Reasons: Paragraph 18(1)(h) of the Act precludes a deduction for personal or living expenses of a taxpayer.
XXXXXXXXXX 992881
J. E. Grisé
November 17, 1999
Dear Sir:
Re: Personal Usage of Food Supplements
This is in reply to your fax of November 1, 1999, requesting our interpretation on the personal consumption of food supplements.
You have clients who are network marketing food supplements. They have proposed to deduct 50% of the cost of their personal consumption of the food supplements as a deduction in computing their income from a business. The reasoning is that there is a business benefit from taking the supplements (i.e., a better product knowledge) and in the absence of any specific guidance in the Income Tax Act (the Act), a 50% business benefit is reasonable.
Paragraph 18(1)(h) of the Act states that no deduction shall be made in respect of personal or living expenses of a taxpayer in computing the income of the taxpayer from a business or property. The personal consumption of a food supplement is a personal or living expense and, thus, no portion of the cost of the food supplement would be deductible.
We hope our comment is helpful.
Yours truly,
John Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
??
- 2 -
.../contd
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, 1999
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, 1999
Email this Content