Words and Phrases - "convention"
Before finding that the annual meeting of the members of the Corporation of Master Pipe Mechanics of Quebec (the "CMMTQ") and the MCEE trade show (Mechanics, Climate control, Electricity and Lighting), of which the CMMTQ is the co-organizer, and which offers, among other things, conventions in which all the members of the industry, whether or not members of the CMMTQ, can participate qualified as conventions, CRA stated:
[I]t is not necessary for the taxpayer to be a member of the organization responsible for the convention, but the taxpayer’s presence at the convention must be related to the business the taxpayer carried on or the profession the taxpayer practises.
However, we reiterate that under subsection 8(2), employees cannot under any circumstances deduct expenses incurred to attend conferences in computing their income.
Spectron Computer Corp. v. MNR, 93 DTC 1473 (TCC)
The taxpayer unsuccessfully argued that interest expenses incurred by it to finance the payroll cost of its R & D personnel were not made for the purpose of generating expenses, not income, and therefore were not described in Regulation 2902(a)(c). Kempo, TCJ. stated (p. 1478):
"that no income was or could have been gained or produced at that time from the property being researched and developed is not determinative because the purpose and direct use of the borrowed funds were focused to that end and no issues were raised concerning the efficacy of the projects under research."
However, registration and travel costs arising from the attendance of R & D staff at computer software conferences were not denied by Regulation 2902(a)(F). Kempo, TCJ. stated (p. 1480):
"If any assembly or gathering portrays a commonality of purpose (which is what we have here) and a commonality of participants (which does not exist here except peripherally through their general interest in computer technology) it will, prima facia be a convention."
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|Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c)||80|
|Tax Topics - Statutory Interpretation - Resolving Ambiguity||106|
Shaver v. The Queen, 2003 DTC 2112, 2004 TCC 10
Expenses incurred by the taxpayer, an Amway distributor, in attending "business training seminars" in Canada and the U.S. were found to be capital expenditures whose deduction was limited by s. 20(10). Lamarre J. stated (at p. 2119):
"... The seminars in question herein can very well be defined as formal meetings of members of an organization (Amway) that are held for business purposes and that result in the acquisition of knowledge by those attending them. Accordingly, in my view, these seminars are conventions ... ."