Commissioned employees can deduct only 25% of the restaurant tab when they take out a client in their base city

By virtue of the combined operation of s. 8(4) and s. 67.1(1), the deduction for where a commissioned employee takes a client out to a restaurant within the metropolitan area of the employer is limited to 25% of the bill, i.e., a complete denial for the employee’s portion under s. 8(4) and a 50% denial for the client’s portion under s. 67.1(1). The Quebec equivalent of s. 8(4) provides an exception from its application where the commissioned employee takes a meal with a client.

CRA effectively confirmed that this was how the federal provisions operated, and stated:

At the request of the APFF, the situation described in the statement of the question and the response of the CRA will be brought to the attention of that Department [of Finance].

Neal Armstrong. Summary of 5 October 2018 APFF Roundtable, Q.8 under s. 8(4).