Paragraph 18(1)(c) - Limitation re exempt income
Administrative Policy
4 October 1999 External T.I. 9916675 - WORKERS COMPENSATION OR PENSION
Awards for non-economic loss or future economic loss received under the Workplace Safety and Insurance Act (Ontario) would be considered to be...
Paragraph 18(1)(e) - Reserves, etc.
Cases
Industries Perron Inc. v. Canada, 2013 FCA 176
The taxpayer ("Perron") made cash term deposits in connection with its potential liability for countervailing and anti-dumping duties imposed by...
De Graaf v. The Queen, 85 DTC 5280, [1985] 1 CTC 374 (FCTD)
The taxpayer disposed of a property and reported a business loss in his 1975 tax return. In computing the loss, the taxpayer deducted from the...
Canada v. General Motors of Canada Ltd., 2008 DTC 6381, 2008 FCA 142
A collective agreement between the taxpayer and the CAW, as amended by them following the decision of the Federal Court of Appeal for the earlier...
Canada v. McLarty, 2008 DTC 6354, 2008 SCC 26, [2008] 2 S.C.R. 79
The full purchase price of $100,000 for the acquisition by the taxpayer of seismic data represented Canadian exploration expense to him...
General Motors of Canada Ltd. v. Canada, 2004 DTC 6716, 2004 FCA 370
Under a collective agreement with its union, the taxpayer agreed to accrue $2 per every overtime hour worked by covered employees in excess of 5%...
Wawang Forest Products Ltd. v. The Queen, 2001 DTC 5212, 2001 FCA 80
If the taxpayer paid a logging contractor in full upon delivery to it of cut wood, it would be subject to liability to the workers' compensation...
Ticketnet Corp. v. R, 99 DTC 5409, [1999] 3 CTC 564 (FCTD)
The taxpayer agreed with Air Canada that: Air Canada would develop a software program for a price of $2 million; for the first five years...
Canadian Pacific Ltd. v. Minister of Revenue (Ontario), 99 DTC 5286, 41 OR (3d) 606 (Ont CA)
Upon receipt of notice of an award by the Workman's Compensation Board, the taxpayer would calculate the amount of the award on the basis of the...
B. Jolly Enterprises Ltd. v. The Queen, 94 DTC 6636, [1994] 2 CTC 379 (FCA)
In finding that a corporate taxpayer was not entitled to deduct expenses incurred prior to its formation and pursuant to an alleged contract...
The Queen v. Foothills Pipe Lines (Yukon) Ltd., 90 DTC 6607, [1990] 2 CTC 448 (FCA)
The taxpayer, which had incurred various expenses in respect of the second phase of a pipeline project which had not yet been constructed, was...
Wil Mechanical Ltd. v. The Queen, 90 DTC 6475, [1990] 2 CTC 224 (FCTD)
Although the taxpayer, as the subcontractor on various jobs, withheld 15% from the amounts it paid to the sub-subcontractors until, generally, the...
Newfoundland Light & Power Co. Ltd. v. The Queen, 90 DTC 6166, [1990] 1 CTC 229 (FCA)
Before finding against the taxpayer on other grounds, the Court accepted that the reference to "contingent account" refers to accounting practice.
Westcoast Petroleum Ltd. v. The Queen, 89 DTC 5153, [1989] 1 CTC 363 (FCTD)
Northern Central Gas was followed. Teitelbaum J. noted (p. 5167) that although "where amounts are put into reserve accounts to cover liabilities...
TNT Canada Inc. v. The Queen, 88 DTC 6334, [1988] 2 CTC 91 (FCTD)
At the end of its 1980 taxation year, the taxpayer (a common carrier) deducted $125,385 for the total of cargo claims which had been filed against...
Sears Canada Inc. v. The Queen, 86 DTC 6304, [1986] 2 CTC 80 (FCTD), aff'd 89 DTC 5039 (FCA)
Sears included in income amounts which it received from customers for its agreement to maintain and repair the sold products for a further year...
Northern and Central Gas Corp. Ltd. v. The Queen, 85 DTC 5144, [1985] 1 CTC 192 (FCTD), aff'd 87 DTC 5439, [1987] 2 CTC 241 (FCA)
It was anticipated by the taxpayer that in its 1978 taxation year it would be required by the Ontario Energy Board to pass along to its customers...
Consolidated-Bathurst Ltd. v. The Queen, 85 DTC 5120, [1985] 1 CTC 142 (FCTD), aff'd on different grounds, 87 DTC 5001, [1987] 1 CTC 55 (FCA)
Semble, that "insurance" premiums paid by the plaintiff to an arm's-length Canadian insurance company, which in turn re-insured various risks with...
Amesbury Distributors Ltd. v. The Queen, 85 DTC 5076, [1984] CTC 667 (FCTD)
A distributor of television sets charged dealers a flat fee of $30 per set in return for providing after-sales servicing of the sets under a...
Cummings v. The Queen, 81 DTC 5207, [1981] CTC 285 (FCA)
Since the liability of the taxpayer at the end of its 1968 taxation year to pay $500,000 to a prospective tenant was contingent inter alia upon...
McClain Industries of Canada Inc. v. The Queen, 78 DTC 6356, [1978] CTC 511 (FCTD)
As at the end of each fiscal year a company accrued the amount of a management bonus, and during the following year the company's...
Harlequin Enterprises Ltd. v. The Queen, 77 DTC 5164, [1977] CTC 208 (FCA)
Sales of books were made each year by the taxpayer to a distributor. The taxpayer was obligated to repurchase any books which the distributor...
Day & Ross v. The Queen, 76 DTC 6433, [1976] CTC 707 (FCTD)
Insurance premiums were payable each year by the taxpayer pursuant to a Lloyds policy which established the premiums payable for each year in...
The Queen v. Ken & Ray's Collins Bay Supermarket Ltd., 75 DTC 5346, [1975] CTC 504 (FCTD)
Kerr, J. indicated, obiter, that s. 18(1)(e) would have applied to unpaid bonuses which the taxpayer sought to deduct: "When the decision to pay...
Mister Muffler Ltd. v. The Queen, 74 DTC 6615, [1974] CTC 813 (FCTD)
Reserves set up for a "guarantee" to replace mufflers installed by the taxpayer were implicitly treated as a contingent account.
The Queen v. Jawl Industries Ltd., 74 DTC 6133, [1974] CTC 147 (FCTD)
The price of lumber declined after the taxpayer contracted to purchase lumber at a stipulated price for delivery in a subsequent taxation year....
J.L. Guay Ltée v. MNR, 71 DTC 5423, [1971] CTC 686 (FCTD), aff'd 73 DTC 5374, [1973] CTC 506 (FCA), aff'd 75 DTC 5094, [1975] CTC 97 (SCC)
A general building contractor in accordance with the terms of its contracts with its subcontractors withheld 10% of the amounts invoiced on a...
Lawson v. Minister of National Revenue, 69 DTC 5155, [1969] CTC 201, [1969] S.C.R. 587
It was submitted on behalf of a mining stock promoter that he should be permitted to follow the "project" method of accounting in determining the...
Time Motors Limited v. Minister of National Revenue, 69 DTC 5149, [1969] CTC 190, [1969] S.C.R. 501
The taxpayer, which was a used car dealer, issued credit notes in partial payments of used cars acquired for resale. The notes were not...
Meteor Homes Ltd. v. MNR, 61 DTC 1001, [1960] CTC 419 (Ex. Ct.)
Kearney J. rejected a submission that a retail sales tax liability of the taxpayer (whose payment had not yet been demanded by the Québec...
Robertson Ltd. v. MNR, 2 DTC 655, [1944] CTC 75 (Ex Ct)
Thorson J., before finding that the taxpayer could exclude unearned insurance premiums from its income on other grounds, stated, with respect to...
See Also
Industries Perron Inc. (anciennement 3654419 Canada Inc.) v. The Queen, 2012 DTC 1072 [at at 2836], 2011 TCC 433, aff'd 2013 FCA 176
Angers J. denied the taxpayer's deduction of a reserve it made in respect of preliminary anti-dumping rulings against it from the International...
Fèdèration des Caisses Populaires Desjardins, 2000 DTC 1585 (TCC), rev'd on second (statutory contribution) issue 2002 DTC 7413 (FCA)
The employees of the taxpayer earned vacation leave during a reference period running from May 1 to April 30 each year. When they took their...
Dibro Investments Ltd. v. MNR, 87 DTC 210, [1987] 1 CTC 2281 (TCC)
Although the taxpayer was obligated to pay 10% of its revenues to its franchisor, it was held these payments in the taxation years in question in...
Barbican Properties Inc. v. The Queen, 97 DTC 122, [1996] 2 CTC 2615 (TCC), briefly aff'd 97 DTC 5008 (FCA)
The taxpayer financed the purchase of "distressed" properties from the Royal Bank through non-recourse loans received from the Royal Bank which...
Alfred Dallaire Inc. v. MNR, 96 DTC 1094, [1996] 1 CTC 2218 (TCC)
The taxpayer, which ran a funeral home business and agreed with many of its customers to provide the required funeral services on each customer's...
Johnston v. Britannia Airways Ltd., [1994] BTC 298 (Ch. D.)
Before going on to affirm a finding of the special commissioners that the taxpayer was entitled to accrue in advance the cost of periodic major...
I.B. Pedersen Ltd. v. The Queen, 94 DTC 1085, [1994] 1 CTC 2355 (TCC)
The taxpayer, which operated a waste landfilled site, was required to include in income the full amount of fees received from a municipality for...
Co-operator's General Insurance Co. v. MNR, 92 DTC 303 (TCC)
Brulé J. found that the amounts deducted by the taxpayer in excess of the amounts actually payable in the year pursuant to the formula in the...
Pioneer Designs Corp. v. MNR, 91 DTC 293, [1990] 2 CTC 2446 (TCC)
Before finding accrued bonuses to be deductible, Garon TCJ. stated (p. 300): "No authority has been cited to me that would require ... the...
Dunblane Estates Ltd. v. MNR, 89 DTC 137, [1989] 1 CTC 2248 (TCC)
The taxpayer was obligated under its collective agreement to let employees claim against their accrued and unused sick leave credits when they or...
Southern Pacific Insurance Co. Ltd. v. C.I.R., [1986] BTC 181 (PC)
It was held in relation to an insurance company that "the amount of the liability of the company for accidents which occurred but were not...
Fred Nesbit Distributing Co. v. U.S., 85-2 USTC 89580 (D.C. Iowa)
The taxpayer, which was a wholesale beer distributor, collected a deposit when it sold beer to dealers, and the dealers were required by law to...
Canada Packers Ltd. v. MNR, 68 DTC 682 (TAB)
Because the taxpayer's fiscal year ended in the last Saturday in March of each year, it was possible for it to pay holiday pay for two Good...
Quebec Photo Service Inc. v. MNR, 67 DTC 315 (TAB)
The taxpayer credited to a special account for each employee an amount equal to a half-day's salary for every month of employment, which the...
Acadia Overseas Freighters Halifax Ltd. v. MNR, 62 DTC 84 (TAB)
Under the terms of its contracts of employment with Lascar seamen, the taxpayer undertook to pay the cost of transporting them to their native...
Capital Transit Ltd. v. MNR, 52 DTC 287 (ITAB)
The taxpayer, the operator of a bus service, credited all sales of tickets to a liability account, and took such amounts into income only when the...
J.J. Joubert Limité v. MNR, 52 DTC 317 (ITAB)
In finding that the taxpayer, a milk distributor, was not entitled to deduct amounts previously received by it represented by unredeemed prepaid...
Administrative Policy
28 January 2021 Internal T.I. 2019-0817641I7 - Acquisition of rights to pension surplus
A portion of the purchase price paid for the acquisition of a business of the Seller by the Purchaser was allocated to the actuarial surplus in a...
S2-F1-C1 - Health and Welfare Trusts
1.50 Although actuarial studies of the trust may recommend the establishment of contingency reserves to meet its future obligations, transfers to...
22 February 2012 External T.I. 2008-0289021E5 - Fair Value Accounting - Liabilities
the correspondent noted that under the GAAP that prevailed in 2008 (contained in Section 3855 of the CICA Handbook) taxpayers whose financial...
4 May 2010 External T.I. 2009-0329391E5 F - Provision pour retour de marchandises
The contracts for sales by a book publisher to its customers provide that books which have not been sold within 12 months may be returned. Would a...
26 August 2005 Internal T.I. 2005-0131171I7 F - Alinéa 18(1) e) de la LIR
A maintenance obligation to landlords did not give rise to a current deduction since no contractual obligation with specific counterparties had...
20 October 2004 Internal T.I. 2004-0086501I7 F - Droits compensateurs
In 2001, the U.S. government began imposed countervailing and anti-dumping duties ("CADD") on the export of softwood lumber products from Canada,...
28 January 2004 External T.I. 2003-0028891E5 F - Perte sur change relative à des contrats de change
A corporation had an accrued foreign exchange loss on foreign exchange contracts that it had entered into to hedge its food-sale operations in the...
16 July 2003 Internal T.I. 2003-0024617 F - DEDUCTIBILITE DES COTISATIONS CSST
The taxpayer recorded an estimate of the workers’ compensation (“CSST”) premium liabilities it had incurred in the year, which was prior to...
11 June 2002 External T.I. 2001-0104075 F - DEDOMMAGEMENT
Regarding whether an award of damages against the taxpayer in connection with its construction of a manufacturing plans was contingent and, thus,...
11 April 2000 Internal T.I. 2000-0001327 - INDEX LINKED GIC CONTINGENT LIABILITY
s. 18(1)(e) would prohibit the deduction by the issuer of the premium on a TSE-certified-linked GIC until the time of payment on maturity...
16 February 1999 External T.I. 9900535 - RESERVES
A reserve fund for future utility costs that a water utility is required to set up pursuant to s. 57 of the Utilities Commissions Act (B.C.) does...
5 February 1996 External T.I. 9528445 - DEDUCTIBILITY OF REPAYABLE INCOME AMOUNTS
Discussion as to whether an amount that a physician billed over the statutory cap on his billings would be deductible prior to the year of repayment.
25 July 1994 External T.I. 9405605 - U.S. COUNTERVAILING DUTY ON CANADIAN SOFTWOOD LUMBER
U.S. countervailing duty cash deposits paid by Canadian lumber companies would be refundable deposits and, therefore, would represent...
18 November 1992 Memorandum 921979 (September 1993 Access Letter, p. 407, ¶C9-286)
A reserve for vacation pay benefits earned by employees in the year and that are reasonably expected to be taken in the following year does not...
30 November 1991 Round Table (4M0462), Q. 5.1 - Acquisition of a Business (C.T.O. September 1994)
Discussion of the treatment of a purchaser that on the acquisition of a business assumes responsibility for liabilities that have not been...
91 CPTJ - Q.16
Although there is no provision of Part I permitting the deduction of accruals for site restoration costs, a payment to a government-mandated site...
90 C.R. - Q14
S.18(1)(e) prohibits the deduction by a mining company on an accrual basis of future removal and site restoration costs.
19 October 89 T.I. (March 1990 Access Letter, ¶1140)
The accrual by a corporation in respect of its obligation to provide pension benefits to an employee who would retire in five years would not be a...
IT-215R "Reserves, Contingent Accounts and Sinking Funds"
IT-467R "Damages, Settlements and Similar Payments"
A reserve or contingent liability for anticipated damages is not deductible.
Articles
Marie-Andrée Beaudry, Dean Kraus, "Selected Income Tax Considerations in the Court-Approved Debt Restructurings and Liquidations", 2015 Annual CTF Conference paper
CCAA Stay does not generate a s. 18(1)(e) contingency (p. 13:32)
[W]hile a stay under the CCAA stays proceedings with respect to damage claims,...
Hirsch, "Real Estate Issues: Traps and Opportunities", 1995 Corporate Management Tax Conference Report, c. 9
Discussion of issues respecting the allocation of common costs for which no legal liability has yet been incurred.
Holmes, "Supplemental Retirement Arrangements May Provide Deferral for Employee and Deduction for Employer", Taxation of Executive Compensation and Retirement, March 1990, p. 243
Where the amount of pension under a supplemental plan that is payable to an executive may not be ascertainable until the executive retires, it...
Paragraph 18(1)(h) - Personal and living expenses
Cases
Scott v. Canada, 98 DTC 6530, [1998] 4 CTC 103 (FCA)
The taxpayer was a self-employed courier who covered approximately 150 kilometres by foot and public transportation daily in order to deliver...
Douglas v. The Queen, 90 DTC 6597 (FCTD)
An employee of the United Steel Workers of America who, over his objections, was placed on permanent assignment in Calgary, and maintained an...
The Queen v. Merten, 90 DTC 6600, [1990] 2 CTC 444 (FCTD)
The taxpayer, who had management responsibilities at the main office of a construction company in Calgary, was permitted to deduct transportation...
The Queen v. Cork, 90 DTC 6358, [1990] 2 CTC 116 (FCA)
A self-employed draftsman commuted from his apartment to various sites in and around the Metropolitan Toronto area. He used a room in his...
The Queen v. Sadavoy, 88 DTC 6065, [1988] 1 CTC 178 (FCTD)
Legal expenses incurred in order to obtain custody of children were non-deductible.
Plante v. The Queen, 83 DTC 5378, [1983] CTC 341 (FCTD)
Although the taxpayer accountant had failed to keep a mileage log it was held, primarily on the basis of the taxpayer's testimony as to the long...
Brooks v. The Queen, 78 DTC 6505, [1978] CTC 761 (FCTD)
The taxpayer sought to deduct $1,200 in respect of a portion of the mortgage interest, taxes and telephone bills for his home, on the ground that...
Randall v. Minister of National Revenue, 67 DTC 5151, [1967] CTC 236, [1967] S.C.R. 484
The taxpayer, who together with his brother was engaged in the business of managing horse racing activities in Vancouver and Portland, Oregon, was...
Cumming v. MNR, 67 DTC 5312, [1967] CTC 462 (Ex Ct)
An anaesthetist rendered services to his patients at the Ottawa Civic Hospital but performed various administrative functions out of his home...
See Also
Shenanigans Media Inc. v. The Queen, 2017 TCC 180 (Informal Procedure)
Shenanigans Media Inc. (“Shenanigans”) was owned by Dylan Everett, an actor, who was about 14 to 16 years old during the years in issue....
Landry v. The Queen, 2014 DTC 1198 [at 3768], 2014 TCC 275 (Informal Procedure)
The taxpayer retired and began receiving pension payments, but needed a signed court order terminating child support payments for his children,...
Lavoie v. The Queen, 2014 DTC 1104 [at at 3218], 2014 TCC 68
The taxpayer's uncontradicted evidence was that his cottage in PEI was used approximately 170 days in a given year, only 10 of which were solely...
Phillips v. The Queen, 2012 DTC 1278 [at at 3823], 2012 TCC 337
The taxpayer was hired as an associate professor in Regina but maintained his business in Winnipeg of hosting, organizing and promoting aboriginal...
Desgagné v. The Queen, 2012 DTC 1237 [at at 3664], 2012 TCC 63 (Informal Procedure)
The taxpayer was a lawyer who frequently appeared in civil court, and sought to deduct, as a business expense, capital cost allowance in respect...
Bruno v. The Queen, 2012 DTC 1260 [at at 3762], 2012 TCC 316 (Informal Procedure)
The taxpayer employed her two teenage children part-time in her custom window coverings business. In lieu of wages, the taxpayer would purchase...
Bégin v. The Queen, 2012 DTC 1111 [at at 3061], 2012 TCC 18 (Informal Procedure)
The taxpayer, an insurance salesman, purchased a life insurance policy on himself and several family members, seeking to earn from the sale a...
Chapman v. The Queen, 2004 DTC 3310, 2004 TCC 617 (Informal Procedure)
The theory that where one lives is a matter of personal choice and, therefore, the cost of getting to work is to a large degree affected by...
Fehrenbach v. MNR, 95 DTC 860, [1995] 1 CTC 2602 (TCC)
Margeson TCJ. found that the taxpayer, a partner in a law firm, had acquired a condominium in a ski area primarily as a recreational facility for...
Sword v. MNR, 90 DTC 1798 (TCC)
An employee of a law firm, who under the conditions of her employment was required to be available by phone and whose personal use of her phone...
Parikh v. Sleeman, [1990] BTC 142 (C.A.)
The taxpayer carried on his professional activities as a general medical practitioner at his surgery and, when necessary, at his private...
MacKinlay v. Arthur Young McClelland Moores & Co., [1989] BTC 587 (HL)
The policy of a firm of accountants was to reimburse its partners for various costs of their moving their residence from one city to another at...
Gurney v. Richards, [1989] BTC 326 (Ch.D.)
A Deputy Chief Fire Officer, who used a car provided to him by the Fire Office which was fitted with Fire Service equipment for travelling between...
Mallalieu v. Drummond, [1983] BTC 380, [1983] 2 All E.R. 1095 (HL)
A self-employed person who maintains a wardrobe of everyday clothes which are reserved for work and commuting to and from work derives some...
White v. MNR, 60 DTC 113 (TAB)
The annual cost to a taxpayer of maintaining a residential telephone was not deductible on computing his income notwithstanding that his...
Administrative Policy
15 November 2012 Internal T.I. 2012-0459321I7 F - Biens locatifs - frais de déplacement
Can a taxpayer owning two adjacent rental duplexes generating property income deduct the travel expenses incurred to travel from the taxpayer’s...
22 October 2012 External T.I. 2012-0452491E5 F - Repas fournis dans le cadre d'une formation
As part of the carrying on of its training business, the taxpayer provides breakfast and dinner, as well as a coffee break. Respecting the...
13 February 2012 External T.I. 2011-0426471E5 - Travel Expenses
travel expenses incurred by a business owner to return home from vacation to respond to a business emergency would not be deductible given that...
9 June 2011 External T.I. 2011-0393331E5 F - Frais de déplacement - principal lieu d'affaires
A part-time self-employed professional has a home office where she makes and confirms appointments with clients, writes consultation notes, keeps...
21 September 2010 Internal T.I. 2010-0377011I7 F - Dépenses de vêtements - travailleur indépendant
In finding that the cost to a self-employed welder of purchasing steel-toed work boots and fire-resistant clothing could not be deducted in...
12 June 2009 Internal T.I. 2009-0324511I7 F - Déductibilité des primes payées
A self-employed financial products broker receives commissions for the sale of life insurance policies that he takes out for his own benefit (the...
11 July 2008 External T.I. 2008-0271941E5 F - Frais de déplacement-principal lieu d'affaires
Marine pilots carry on their pilotage business through a partnership whose office is used only by administrative staff. The pilots receive their...
4 July 2007 Internal T.I. 2007-0237631I7 F - Frais de repas - Secteur du taxi
Regarding a self-employed taxi driver working at a fixed locale in the Montreal area, who picked up clients during working hours and incurred meal...
16 January 2007 External T.I. 2006-0217641E5 F - Dépenses de vêtements - travailleur indépendant
A self-employed person who runs a business as a personal consultant and stylist, and provides advice on wardrobe reorganization, selection,...
10 August 2006 Internal T.I. 2006-0191571I7 F - Frais de déplacement - biens locatifs
A taxpayer owns two adjacent rental properties 100 km from the taxpayer’s principal residence. Are these considered as two properties for...
16 May 2006 External T.I. 2005-0155251E5 F - Dépenses de vêtements - travailleur indépendant
Before concluding that a self-employed minister could not claim CCA for or deduct the cost of his suits and ties, CRA stated:
Where a taxpayer...
6 April 2006 External T.I. 2005-0157461E5 F - Frais de déplacement - actionnaire
In finding that airfare and hotel expenses incurred by an investment company to attend a general meeting of shareholders in connection with one of...
26 October 2005 External T.I. 2005-0117551E5 F - État des loyers de biens immeubles
In finding that travel and accommodation costs incurred by the taxpayer in dealing with a rental property at a distant location that had been left...
28 February 2005 External T.I. 2004-0108551E5 - Disability Insurance Through a Professional Assoc.
"Where an insurance policy, including one purchased through a professional association, provides the self-employed taxpayer with a benefit for...
17 February 2005 External T.I. 2004-0104731E5 - Disability Income Insurance
"Where a Policy, purchased directly from an insurance company or indirectly through a professional association, provides an Individual, carrying...
30 November 2004 External T.I. 2004-0090181E5 F - Assurance maladie grave
A corporation purchases a critical illness insurance policy on the life of its sole shareholder and there is also, at an additional cost, a rider...
24 September 2004 External T.I. 2004-0055421E5 F - Frais de déplacement
A self-employed radiologist, who does not have a permanent office at Hospital A (80 kilometres from his home) but an office and an X-ray room are...
4 May 2004 Internal T.I. 2004-0060871I7 F - Frais de coaching
In finding that costs incurred by a self-employed person for coaching services were not deductible by virtue of s. 18(1)(h) in computing income...
21 January 2002 External T.I. 2001-0080325 F - FRAIS DE VOYAGE-BIENS LOCATIFS
The taxpayer makes two return trips to Spain each year to personally look after rental properties and incurred approximately $1,800 in travel...
28 June 2001 External T.I. 2000-0061365 F - Frais de déplacement - athlètes
Regarding whether an amateur athlete can deduct, from the business income earned as an athlete, accommodation and meal expenses incurred in the...
22 September 1998 Memorandum 982320
The Scott case is restrictively interpreted. "Only where a taxpayer's business involves non-motorized locomotion will a business deduction be...
23 June 1994 External T.I. 9403465 - SEMINAR EXPENSES
The amount in respect of a four-day seminar held during a 12-day European cruise for self-employed professionals will be deductible to the extent...
15 February 1993 External T.I. 9334215 F - Travel Expenses - Rental Property
RC is prepared to allow the deduction of reasonable motor vehicle expenses incurred by an individual who owns only one rental property where the...
4 May 1992 TI 920636
Premiums paid by a partnership under a disability plan to insure against the loss of income earning capacity of its partners would not be...
3 April 1992 T.I. 9206128 (May 1993 Access Letter, p. 191, ¶C9-264)
Amounts paid for the services of a call girl are not deductible.
27 September 1991 T.I. (Tax Window, No. 10, p. 20, ¶1488)
If an employee is not entitled to claim expenses for an office in the home, travel between home and the first customer of the day is considered to...
6 March 1991 Memorandum (Tax Window, No. 1, p. 15, ¶1146)
Notwithstanding the Hoedel case, RC does not accept that travel between the taxpayer's home and place of work is other than primarily personal in...
Articles
Income Tax Technical News, : Comment on Scott case.
Paragraph 18(1)(l) - Use of recreational facilities and club dues
See Also
Hewlett-Packard (Canada) Co. v. Canada, 2005 DTC 976, 2005 TCC 398
The costs incurred by the taxpayer in providing free accommodation as a reward to employees at various large resort hotels (such as the Deerhurst...
Administrative Policy
7 January 2013 External T.I. 2012-0460021E5 F - Remboursement de cotisations à un club
Respecting where paramedics are reimbursed by their employer for the cost of membership fees in a fitness centre, CRA stated:
Under paragraph...
Income Tax Technical News, No. 12 under "Meals and Beverages at Golf Clubs"
"A 'facility' will not include the dining room, banquet halls, conference rooms, beverage rooms or lounges of a golf club and, thus, the...
17 November 1993 Income Tax Severed Letter 9330166 - Membership Fees
Discussion of the meaning of the phrase "membership fees ... in any club the main purpose of which is to provide dining, recreational or sporting...
21 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 22)
Interest on money borrowed to acquire a yacht used to entertain clients for business purposes is non-deductible in light of s. 18(1)(l)(i)....
7 March 1990 T.I. (August 1990 Access Letter, ¶1367)
Where a corporation acquires a ski pass valid for 36 visits at an arm's length ski resort, the visits may be made by any individual designated by...
2 March 1990 T.I. (August 1990 Access Letter, ¶1367)
Where the taxpayer had acquired a golf pass valid for a number of rounds on a golf course, the expenditure was non-deductible by virtue of s....
Subparagraph 18(1)(l)(i)
Cases
The Queen v. Sie-Mac Pipeline Contractors Ltd., 92 DTC 6461 (FCA)
Expenses incurred by the taxpayer in entertaining clients at a remote B.C. fishing lodge, including room, food, transportation, fishing licences,...
The Queen v. C.I.P. Inc., 88 DTC 6005, [1988] 1 CTC 32 (FCTD)
A couple acquired a tugboat, converted it to use as their residence, and used it for fishing charter purposes for 4 to 6 weeks a year, including a...
The Queen v. Jaddco Anderson Ltd., 84 DTC 6135, [1984] CTC 137 (FCA)
The deduction of sums paid for the rental of a fishing lodge that was used by the taxpayer for the entertainment of some of its business clients...
See Also
Fehrenbach v. MNR, 95 DTC 860, [1995] 1 CTC 2602 (TCC)
A condominium of the taxpayer in a ski area was not a "lodge" given that it was a four-seasons residence or home which was occupied as such by him...
Administrative Policy
13 May 2016 External T.I. 2016-0635601E5 F - Dépenses de commandite
CRA provided a general response to an inquiry as to the deductibility of sponsorship expenses incurred in favour of a golf club, referencing both...
1 March 2013 External T.I. 2013-0477911E5 - Expenses to host employees and spouses at a resort
A taxpayer intends to offer employees and their spouses an all-expenses-paid week-long trip to a resort located outside of North America, in which...
22 January 2010 Internal T.I. 2009-0346971I7 F - Événement ayant lieu dans un club de golf
At a golf day organized for all its employees, the company pays for the green fees, the rental of golf equipment, and the food (shown separately...
20 July 1995 External T.I. 9504745 - DEDUCTIBILITY OF EXPENSES INCURRED AT RESORTS AND LODGES
General discussion of RC's "fair and liberal interpretation" of the provision.
21 November 1994 External T.I. 9424395 - USE OF A LODGE
Where property of a type described in s. 18(1)(l)(i) is used for business purposes (which do not include the entertainment or recreation of...
2 August 1994 Internal T.I. 4-941841
Following its review of the Sie Mac case (93 D.T.C 5158), RC has determined that it will continue to follow the policy on the deduction of...
6 June 1994 External T.I. 9328785 F - Meaning of Lodge
The word "lodge" means "an inn or resort hotel, particularly one that is a centre for recreational activities, as well [as] a dwelling occupied on...
29 August 1991 T.I. (Tax Window, No. 8, p. 19, ¶1426)
Incidental income from a property to which s. 18(1)(l)(i) applies may be offset by the non-deductible costs. A similar offset applies where the...
84 C.R. - Q.15
Where a "lodge" (including an inn or resort hotel) is used for a genuine business purpose (not including the entertainment of clients, suppliers,...
Subparagraph 18(1)(l)(ii)
Administrative Policy
6 August 2002 Internal T.I. 2002-0130897 F - RECOMPENSES ES QUASI-MONETAIRES
Would an employer who makes gifts to its employees of the purchase of a membership to a recreation or sports club in reliance on CCRA’s new...
Paragraph 18(1)(m) - Limitation re employee stock option expenses
Cases
Mobil Oil Canada Ltd. v. Canada, 2001 DTC 5668, 2001 FCA 333
Under the Road Allowances Crown Oil Act (Alberta), 1.88% of producing oil reservoirs of the taxpayer was deemed to be property of the Alberta...
Utah Mines Ltd. v. The Queen, 92 DTC 6194, [1992] 1 CTC 306 (FCA)
The taxpayer, which was a U.S. corporation with a mining operation in B.C., was prohibited by s. 18(1)(m) from deducting royalties payable by it...
Gibralter Mines Ltd. v. The Queen, 85 DTC 5085, [1985] 1 CTC 116 (FCTD)
Provincial royalties which are determined on an annual basis should also be determined for the purposes of s. 18(1)(m) on an annual basis. The...
See Also
Potash Corporation of Saskatchewan Inc. v. The Queen, 2022 TCC 75, aff'd 2024 FCA 35
The taxpayer, which produced and sold potash from mines in Saskatchewan, was subject to both a profit tax and to the making of “base payments”...
Cogema Resources Inc. v. The Queen, 2004 DTC 3674, 2005 TCC 750
Deduction of a resources surcharge paid by the taxpayer to the Saskatchewan government, equal to 3.6% of the value of resource sales made by it,...
Hamilton v. The Queen, 97 DTC 787, [1997] 1 CTC 2446 (TCC)
In finding that annual provincial coal licence fees paid by the taxpayer in respect of a licence held by a corporation of which he was a...
Administrative Policy
29 March 1994 External T.I. 9333335 - CROWN ROYALTY ON FARMOUT PROPERTY
Re application of s. 18(1)(m)(v) to oil production from farm-out wells; and potential application of s. 80.2.
28 March 1991 Memorandum (Tax Window, No. 1, p. 21, ¶1141)
The Saskatchewan Resource Surcharge is computed with reference to production and therefore is a non-deductible Crown charge.
89 C.P.T.J. - Q6
The Saskatchewan capital tax surcharge (based on 2% of gross resource revenue) is a tax computed by reference to the value of production, and...
89 C.P.T.J. - Q7
Compensatory royalties payable by a crown lessee under the Alberta Mines and Minerals Act are in relation to the lessee's ownership of Canadian...
Paragraph 18(1)(p) - Limitation re personal services business expenses
Administrative Policy
19 January 1993 T.I. (Tax Window, No. 28, p. 17, ¶2372)
A corporation that carries on a personnel services business is entitled pursuant to s. 18(1)(p)(ii) to deduct the amount of a retiring allowance...
Subparagraph 18(1)(p)(ii)
Administrative Policy
9 March 2020 External T.I. 2013-0490301E5 F - Société exploitant une EPSP
Is a corporation carrying on a personal services business ("PSB") entitled to deduct the following under s. 18(1)(p)(ii): (i) the costs of leasing...
Subparagraph 18(1)(p)(iii)
Administrative Policy
7 October 2011 Roundtable, 2011-0411891C6 F - Dépenses- EPSP - négociant en vente
Must a corporation carrying on a personal services business (PSB) of selling property or negotiating contracts receive commissions from which the...
Paragraph 18(1)(r) - Certain automobile expenses
Administrative Policy
4 March 2002 External T.I. 2001-0106325 F - ALLOCATION POUR UNE AUTOCARAVANE
An employee who sometimes uses his motorhome to travel in the performance of his duties of employment is paid a per-kilometre allowance for the...
27 April 1990 T.I. (September 1990 Access Letter, ¶1410)
Where a consulting firm reimburses the travelling expenses of its employees and charges the travelling expenses on an itemized bill sent to its...
Paragraph 18(1)(t) - Payments under different acts
Cases
Doulis v. The Queen, 2014 DTC 1054 [at at 2933], 2014 TCC 26 (Informal Procedure)
Lamarre J dismissed the taxpayer's arguments that he should be able to deduct interest on tax arrears as a business expense. Such deductions were...
Administrative Policy
S4-F2-C1 - Deductibility of Fines and Penalties
1.23 …Paragraph 18(1)(t) does not preclude the deduction of fines, penalties and interest levied under other statutes. However, section 67.6...
Example 5
In 2013, X Corp. fails to collect tax levied under the Tobacco Tax Act of Ontario. Interest and penalties are imposed under subsections 18.1(1)...
Provincial income tax
1.24
Paragraph 18(1)(t) does not prohibit the deduction of provincial income tax. However, provincial income tax is not an expense made or...
19 June 2003 Internal T.I. 2003-0021297 F - LOI SUR L'ACCISE PENALITES INTERETS
Regarding the deductibility of interest and penalties arising under the ITA and ETA, the Directorate indicated that deductibility of the former...
10 May 2001 Internal T.I. 2001-0065827 F - FINES + PENALTIES - INTÉRETS ET PÉNALITÉS
CRA noted that Ioegen (96 DTC 1993) found that s. 18(1)(t) was enacted for greater certainty.
Paragraph 18(1)(u) - Fees — individual saving plans
Cases
Wickham Estate v. The Queen, 2015 DTC 10125 [at at 102], 2014 TCC 352 (Informal Procedure)
Fees paid by the taxpayer otherwise would have been fully deductible under s. 20(1)(bb). However, as about 20% of her portfolio was in a RRIF,...