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The Canada Revenue Agency (CRA) Guidelines for Tax Deduction on Meals & Entertainment Expenditure

The Canada Revenue Agency (CRA) Guidelines for Tax Deduction on Meals & Entertainment Expenditure

Can You Take Off Meals & Entertainment Expenditure?

Wouldn't life become very easy if expenses incurred by businesses in terms of meals and entertainment were deductible 100 % from our own tax? Unfortunately, that is rarely the situation. This guide clarifies your potential questions on deducting food, beverage and entertainment expenses, and those unique situations where you can claim 100% deduction.

When Meals & Entertainment Expenditure can be Claimed

Entrepreneurs or the self-employed can claim meals, beverages and entertainment expenses, where the sole purpose of these expenses is to earn income from their businesses.

The CRA’s  50 Percent Rule in Relation to Meals & Entertainment

As per the Canada Revenue Agency “The maximum amount you can claim for food, beverages, and entertainment expenses is 50% of the lesser of the following amounts: ü  The amount you incurred for the expenses or ü  An amount that is reasonable in the circumstances Simply put, the maximum amount you can claim for entertainment, food and beverages expenses is half of either the amount you spend or an amount that makes sense that should be spent on meals and entertainment depending on the circumstances; whichever is less, can be claimed. The 50 % rule is also applicable in such situations where the amount incurred for meals and entertainment:

  • Can bed deducted as an expense
  • Is an amount inclusive within the other capitalized expenditure. For example, involved in the total cost of property or depreciable assets or
  • Is the amount comprised of other expenses such as the cost incurred in scientific experiments or research for the development of businesses, inventory related cost etc.

Also, such other categories or situations where this rule applies is the expenditure made for the food, drink, and entertainment of the employees you hired. E.g. a salesman who worked on commission. Also, the traveling expense incurred for those employees who are working from a different place.

What Should be Treated as Meals and Entertainment?

The food and beverages (meals) category include expenses incurred in the consumption of food or drinks. All such expenses including tips and taxes should be carefully documented because they're subject to the 50% rule.According to CRA “Entertainment expenses include tickets and entrance fees to an entertainment or sporting event, gratuities, cover charges, and room rentals such as for hospitality suites.” For further details see Bulletin IT-518, Food, Beverages, and Entertainment Expenses Further, performances, concerts and athletic events, expenses made for entrance in fashion shows, expenses related to guests entertainment as stated above, these expenses clearly fall into the category of meals and entertainment. You can claim some of the expenses that may fall into this category. For example, providing services to your business client like the cost of a tour guide and security.

CRA About Tips & Taxes

According to CRA guidelines, tips and taxes are included in the total of billing items. Taxes are subject to state rules and regulations. For example, the customer relevant to your business having lunch at a restaurant billed as follows: Meals & Drink $50 HST (Ontario_ 13%) $6.50 In addition, the tip amounted to $10, therefore, the total billing to your business customer is 66.50. In this regard, the amount you can claim in your business tax return as expense subject to 50 % of total billing amounted to $33.25.

When can You Claim 100% of the Expenses Incurred in Meals & Entertainment?

You can claim the entire expense incurred for meals and entertainment: 1) If it is a registered charity event organized solely for fundraising purposes where you incurred the expense for meals & entertainment. Note:  To be on the safe side the purpose of the registered charity must be to raise funds in the event and not for their regular activities to achieve their goals or targets. 2) In case of expenses incurred in a Christmas party or likely similar events, where all of your workers or employees were invited from a specific location. Note: These events need not be organized at your registered business address. They are likely to be organized at a different place other than your business site e.g. for such events you can arrange a rented site restaurant or other similar locations. Regardless of where you host this event, you can claim 100% of food and entertainment expenses. 3) If the expenses related to meals and entertainment were added to the employee's income. Note: Employees must not be working from a remote or particular place where business operations are being governed. 4) If you travel by bus, train or by airplane, and the expenses for meals and entertainment were included in travel expenses. Note: If traveling via boat, ferry or ship, the amount for meals and entertainment expenses can only be claimed by up to 50%. 5) When you show meals and entertainment expenses on the bill which you charged to your customer or client, you can claim 100% of such expenses.

Conventions and Seminars?

The rules regarding conventions, conferences and seminars are as follows. When you participate in such events where refreshment is provided that means food, drink and entertainment are available to the participants. The amount charged by the organizers is the participation fee (which includes refreshment fee). You cannot, therefore, claim such fee as meals and entertainment because it doesn’t fall into this category according to the Canada Revenue Agency. But only a $50 expense is treated as meals and entertainment expense and this is subject to the 50 % rule. You, therefore, can only claim 50% of this amount each day which is $25. The above-stated rule doesn’t include such incidental refreshments which are present during the conventions or seminars like juice, tea, coffee, muffins, and doughnuts. According to the CRA, the participation fee for the conference, seminar or similar event is taken as the actual fee paid less the amount payable for entertainment, food, and beverages. This means that your entertainment and food claim has to come from the conference fee. For instance, Canada Revenue Agency quoted “A fee of $500 is paid for attendance at a three-day business conference in 1995. Meals and entertainment are provided to participants, but no amount of the fee is allocated or identified for those services. As a result, subsection 67.1(3) deems $150 to be paid or payable for food, beverages, and entertainment ($50 per day) and to be subject to the 50% limitation. Assuming all other conditions for deductibility are met, the taxpayer may deduct $350 plus 50% of the $150 deemed to be for meals and entertainment ($75). Therefore, the maximum deduction for the conference expense is $425.”

Special Rules for Meals & Entertainment for Some Businesses

The businesses which supply meals and organize entertaining events are not under the rule of 50%; they are subject to deduct 100%. Long-haul truck drivers who incur expenses for meals and entertainment during their travel can claim 80 percent of such amount. Firstly this rule applies when a truck driver drives continuously for at least 24 hours away from home. Secondly, this applies when he is delivering goods to a distance of at least 160 kilometers. Rickshaw drivers and couriers who are self-employed working via bicycle or on foot can claim total expenses which they spend extra for meals (food & drink) within their normal working hours (eight hours). Or a daily fixed rate of $17.50. Note: According to the Canada Revenue Agency it is compulsory to have proper documentation when claiming such expenses as proof that these expenses were incurred to earn business income.

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How to write-off business meal expenses: cra rules explained.

If you’re a small business owner or an employee who travels for work, you might be wondering how to deduct your meal expenses from your taxes. Well, the Canada Revenue Agency (CRA) has some rules that you need to follow, and they’re not always straightforward. This blog post detail what the CRA rules about meals and entertainment expenses, and how to make sure you’re claiming them correctly on your 2023 tax return.

A person paying the bill at a restaurant for a client, representing the deduction of business meal expenses in Canada.

The 50% Rule for Business Meals

First of all, you need to know that the CRA limits the amount you can deduct for meals and entertainment expenses to 50% of the actual cost or a reasonable amount, whichever is less. This means that if you spend $100 on a business lunch with a client, you can only claim $50 as a deduction. The same applies if you buy tickets to a show or a game for your client or yourself as part of your business trip.

But why 50%? The CRA says that this is because meals and entertainment expenses are partly personal in nature, and partly for the purpose of earning income. So, they only allow you to deduct the portion that is related to your business.

There are some exceptions to the 50% rule, though. For example, if you’re hosting a party or an event for at least six employees, and it’s not more than six times a year, you can deduct 100% of the cost. Or, if you’re providing meals or entertainment to a charity or non-profit organization, you can also claim the full amount.

The 50% rule also applies to other types of expenses that include meals and entertainment, such as:

  • Capital expenses , such as buying a property or an asset that has meals and entertainment costs included in the price
  • Research and development costs , such as conducting surveys or experiments that involve meals and entertainment
  • Business development costs , such as launching a new product or service that involves meals and entertainment

The 50% rule also applies to employee expenses for meals and entertainment, such as:

  • Commission-based salesperson expenses
  • Travel expenses for employees who frequently travel away from their employer’s place of business

Meal Allowance vs. Per Diem Allowance

Another thing to keep in mind is that the 50% rule also applies to meal allowances and per diems. A meal allowance is when your employer reimburses you for the exact amount you spent on meals during your business trip. A per diem is when your employer gives you a fixed amount of money per day to cover your travel expenses, including meals.

If you receive a meal allowance, you can deduct 50% of the amount you spent on your meals, as long as you have receipts to prove it. If you receive a per diem allowance, you can deduct 50% of the amount you received, as long as it is reasonable and does not exceed the CRA’s prescribed rates. You do not need receipts to claim a per diem allowance.

One more thing: Are you using your personal vehicle to travel for work-related purposes? Using an expense tracker app will save you time by automatically tracking your business expenses and ensure you properly deduct those expenses for tax savings.

Deducting your business meal expenses in Canada can help you reduce your tax bill and save money. Remember, these expenses are only deductible if they are reasonable and necessary for your business. You need to follow the rules and limitations set by the Canada Revenue Agency (CRA) to avoid any problems or penalties. And don’t forget to keep all your receipts and records in case the CRA asks for them, and consult a tax professional if you have any questions or doubts.

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Meal & Travel Expenses for Corporate Tax Filing

woman reading text messages on a cellphone while sitting alone at a counter in a cafe enjoying a meal

Meal expenses are a common tax deduction for many individuals, but determining what is and isn’t taxable can be confusing, especially when it comes to corporate tax planning .

The Canada Revenue Agency (CRA) sets out specific rules and regulations for what can be claimed as a meal expense, and it’s important to understand these guidelines to avoid any tax complications.

In this article, we’ll explore what is and isn’t taxable when it comes to meal and vehicle rates, the difference between meal, travel, and entertainment expenses, the limits to meal expenses, how to claim meal expenses on your tax return, and if any of this differs if you’re self-employed.

Let’s get started!

What’s Taxable and What Isn’t When It Comes to Meal and Vehicle Rates

When it comes to meal and vehicle rates, not all expenses are created equal.

The CRA sets out specific guidelines for what can and cannot be claimed as a deduction.

In general, meal expenses are only tax-deductible if they are incurred while you are away from your usual place of business or employment or if you are required to work overtime and cannot reasonably return home for a meal.

If you travel for work purposes, you can claim meal expenses with the CRA as long as the travel is for a duration of 12 hours or more.

The CRA also sets out specific rules for vehicle expenses. If you use your personal vehicle for work purposes, you can claim expenses such as gas, insurance, and maintenance.

However, you can only claim the portion of these expenses that relate to work-related use.

For example, if you use your car 50% of the time for work purposes, you can only claim 50% of the expenses.

Is There a Difference Between a Meal Expense, a Travel Expense, and an Entertainment Expense?

It’s important to understand the differences between meal expenses, travel expenses, and entertainment expenses.

Meal expenses are costs associated with food and beverages while traveling or working away from your usual place of business.

Travel expenses are costs associated with travel, such as transportation, accommodation, and meals.

Entertainment expenses are costs associated with entertaining clients or customers, such as tickets to sporting events or meals at restaurants.

How Are Meal and Travel Expenses Calculated?

To calculate meal and travel expenses , you can choose between the detailed or simplified method.

The detailed method allows you to claim the actual amount you spent, while the simplified method uses a flat rate for vehicle and meal expenses.

Keep your receipts if you use the detailed method, but note that the CRA may still request documentation if you choose the simplified method.

Your total travel expenses include travel assistance provided by your employer and any expenses you paid for.

Is There a Limit to Meal Expenses When I File My Taxes?

Yes, there is a limit to meal expenses when filing taxes with the CRA, and it depends on the method chosen to calculate the expenses.

If using the simplified method, the limit is $23 per meal, to a maximum of $69 per day per person.

However, if using the detailed method, the limit is the actual amount spent, with receipts required as documentation.

How Do I Claim Meal Expenses on My Return?

cra travel and entertainment

Claiming meal expenses on your tax return can be a straightforward process if you keep accurate records, follow the eligibility criteria set out by the CRA, and enter the information correctly on your tax return.

By taking the time to understand the rules and regulations, you can reduce your tax bill and avoid any complications with the CRA.

Here are the steps to follow:

Step 1: Keep Accurate Records

To claim meal expenses on your tax return, you need to keep accurate records and receipts of all meals and beverages purchased for business purposes.

These records should include the date, location, cost, and business purpose of each meal.

Make sure you keep these records organized and in a safe place.

Step 2: Determine Eligibility

Meal expenses are only tax-deductible if they are incurred while you are away from your usual place of business or employment or if you are required to work overtime and cannot reasonably return home for a meal.

If you travel for work purposes, you can claim meals as long as the travel is for a duration of 12 hours or more. Make sure your expenses meet the eligibility criteria set out by the CRA.

Step 3: Calculate the Amount

Calculate the total amount of meal expenses you are eligible to claim on your tax return.

Remember to only claim expenses that are incurred for business purposes and that meet the CRA’s guidelines.

Step 4: Enter on Tax Return

On your tax return , enter the total amount of meal expenses you are claiming as a deduction against your income.

Be sure to follow the instructions on your tax return carefully to ensure you are entering the information in the correct place.

Step 5: Keep Supporting Documents

Make sure you keep all supporting documents, including receipts and records of each meal, in case the CRA requests them for verification.

These documents should be kept for at least six years from the end of the tax year to which they relate.

Is Any of This Different if I’m Self-Employed?

If you’re self-employed , the rules and regulations for claiming meal expenses are slightly different.

You can claim meal expenses as a deduction against your self-employment income as long as they are incurred for business purposes and meet the CRA’s guidelines.

However, it’s important to note that you cannot claim meals that are considered personal or private in nature, such as meals with family or friends.

In addition, if you’re self-employed, you can also claim vehicle expenses related to your business.

This includes expenses such as gas, insurance, and maintenance.

However, you can only claim the portion of these expenses that relate to work-related use, similar to when you use your personal vehicle for work purposes as an employee.

Understanding Meal and Travel Expenses for Corporate Tax Filing

Understanding the guidelines and regulations surrounding meal and travel expenses can save you time and money when it comes to filing your corporate tax returns.

By keeping accurate records and receipts and ensuring that your expenses meet the eligibility criteria set out by the CRA, you can claim meal expenses as a deduction against your income.

It’s also important to note the differences between meal, travel, and entertainment expenses and to keep personal and private expenses separate from business expenses.

If you’re still unsure about how to claim your meal and travel expenses, it’s always a good idea to seek the advice of a professional.

At Liu & Associates, we specialize in corporate tax filing and can help you navigate the complicated world of tax regulations.

Contact us today for a consultation , and let us help you maximize your tax deductions while staying compliant with the CRA.

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Food and Entertainment Expenses Are Not Always Limited to 50%

cra travel and entertainment

One of the first things you learn as a new business owner about deducting business expenses on your Canadian income tax return is that you rarely get to claim 100% of the costs you incur.

Whether it’s Capital Cost Allowance , business-use-of-home expenses , or motor vehicle expenses, you can only claim so much of what your expenses actually were according to the rules for that particular tax deduction.

Meals and entertainment expenses are no exception; the general rule is that the maximum amount you can claim for food, beverages, and entertainment expenses is 50% of either the amount you incur or an amount that is reasonable in the circumstances, whichever is less.

But that’s not always the case. There are actually quite a few situations where you can claim more of a food or entertainment expense or even all of it which you’ll want to be aware of so you can make the most of your meals and entertainment expense claim on your T2125 form (Statement of Business or Professional Activities).

Exceptions to the 50% Rule

Some exceptions to the 50% rule for meals and entertainment expenses are based on the kind of work people do and/or the type of businesses they run:

  • Long-haul truckers can claim 80% of the food and beverages they consume during eligible travel periods (a period of at least 24 continuous hours away from where they live and transporting goods at least 160 kilometres away).
  • Self-employed foot and bicycle couriers and rickshaw drivers can claim the entire cost of the extra food and beverages they need to consume in a normal eight hour work day (or, for 2006 and later tax years, a daily flat rate of $17.50).
  • Businesses such as restaurants, hotels and airlines can claim the entire cost of expenses incurred providing food, beverages or entertainment to paying customers. Promotional samples are also exempt.
  • If your employee(s) work at a remote location , where an employee “could not reasonably be expected to establish and maintain a self-contained domestic establishment” and you provide food and beverages, you can claim 100% of the costs.

Other exceptions relate to specific situations such as providing food and/or entertainment at events.

You can claim 100% of your food and entertainment expenses when:

  • You bill your client or customer for the meal and entertainment costs, and show these costs on the bill.
  • You include the amount of the meal and entertainment expenses in an employee’s income.
  • You incur meal and entertainment expenses for a Christmas party or similar event, and you invite all your employees from a particular location. (You can only hold six events like this a year though!)
  • You incur meal and entertainment expenses for a fund-raising event that was mainly for the benefit of a registered charity.

Wondering About Conventions?

You can deduct the cost of going to up to two conventions a year, but alas, the cost of food and entertainment is subject to the 50% rule. Even if the cost of food and entertainment is included in the convention fee, which means you can deduct $50 a day as a meal and entertainment expense, the 50% limit still applies.

Claim All the Business Expenses You’re Entitled To

To learn more about business expenses, see the Canada Revenue Agency’s Business and Professional Income Guide  – or let TurboTax Home & Business lead you through the process of claiming business expenses on your tax return. Especially designed for sole proprietors such as contractors and consultants, TurboTax Home & Business uses an enhanced business interview to guide you through the self-employment section of the tax return – making sure that you get all the tax deductions and credits you’re entitled to.

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cra travel and entertainment

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Tax planning, how to claim meals and entertainment expenses.

  • June 16, 2023

Amazon Sellers Canada Tax Guide

I feel like I’m part of a cool club when I get to charge my restaurant or pub bill to the company card. Big tip? Sure, why not – it’s a write-off anyway, right? Well, those probably are eligible business expenses, but there are a few quirks when claiming meals and entertainment expenses. Tell us more you say? Ok, strap in because it’s about to get wild! … or at least educational.

When Can You Claim Meals and Entertainment Expenses?

The general rule for claiming meals and entertainment expenses is that they are deductible up to 50% of the total cost when  incurred for the purpose of earning income .

For example, if you are taking a customer out for a meal or treating a prospective client to theatre tickets, these expenses could be considered as incurred for the purpose of earning income.

If you forgot to bring your lunch to the office and you order some Tacofino so that you don’t get hangry, that wouldn’t be considered as incurred for the purpose of earning income; that is just a delicious substitution for your homemade lunch.

They’re Deductible at 50% (Most of the Time)

The other piece to the general rule for claiming meals and entertainment costs is that they are only deductible at the lesser of:

  • 50% of the total cost incurred, or
  • 50% of what would be reasonable given the circumstances.

What is reasonable varies depending on the circumstance (and probably depending on who you ask at CRA).

However, there are some cases when the 50% rule does not apply.

Deductible at 100%

  • Meals and entertainment costs relating to an event held by your organization that all of your employees are invited to attend (Christmas party for example). You can deduct 100% of expenses for up to six events per year.
  • You bill your client or customer for the cost and show break these costs out on your invoice.
  • The cost of the meal is included in a travel fee. For example, if you take a ferry and there is a built-in meal with the ticket, the full ticket price is deductible.
  • If the meal and entertainment expenses are incurred for a fund-raising event held for the benefit of a registered charity.
  • A business that regularly provides food, beverages and entertainment for compensation (e.g. restaurant or hotel) can claim 100% of these costs.
  • Self-employed foot and bicycle couriers can deduct 100% of the cost of the extra food and beverages they must consume in a normal working day ( more on this ).

Deductible at 80%

  • Meals and entertainment costs for long-haul truck drivers are deductible at 80% when incurred during an eligible travel period. ( More on how this works )

Not Deductible

  • Costs incurred for use of recreation facilities and club dues are not deductible.
  • The purchase of season tickets for sporting events are not deductible unless satisfactory proof is provided that the tickets are a promotional expense.
  • Meals claimed while outside a sales territory or on a vacation are generally not deductible as they are not considered to be incurred for the purpose of earning income.

Travel Meals and Entertainment Expenses

Travel costs are eligible to be deducted when incurred to earn income. This could include transportation, accommodations and meals expenses. It is important to note that  the same 50% limit applies to the cost of meals, beverages and entertainment when you travel . The costs don’t become fully deductible just because you’re travelling. The 50% limit also applies to the cost of food and beverages served and entertainment enjoyed when you travel on an airplane, train, or bus when the ticket price does not include such amounts.

Documenting Expenses

It is important to keep records of all business expenses, but there are also some documentation best practices specific to claiming meals and entertainment expenses.

  • Note down the name of the customer(s) or other persons who were in attendance.
  • Retain the contact details of the parties that attended the event.
  • Document the client or business matter to which the meeting or event related.

Keeping this information will help ensure that the expenses can be related to earning income should CRA ever inquire. We find that a product like Dext works great for this purpose – you can take a photo of your receipt right at the restaurant, add your notes and throw the paper away before you step out the door.

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Are Meals and Entertainment Tax Deductible? 2022 Brings More Tax Changes

Attorney Ryan Reiffert

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Changes to Meal and Entertainment Tax-Deductibility

Tcja changes in 2020, 2022 meal and entertainment tax deduction – quick reference chart, the non-deductible expenses.

  • Meals that you have with a client or business partner during entertainment
  • Sporting event tickets
  • Club memberships as well as club-related expenses
  • Transportation expenses associated with a business meal, even if the meal was at a restaurant

100 Percent Deductible Expenses

  • Company Parties: meals are 100% deductible if you are serving them at a company-wide party (such as a Christmas Party or an Employee Appreciation Party, etc)
  • Marketing To The Public: food and drinks provided to the public free of charge, for example at a marketing event for prospective clients are also 100% deductible
  • Cafeterias and Employer-Provided Food: food is 100% deductible if it is a part of taxable compensation for the employees (such as an employer-sponsored meal program or cafeteria for employees); the catch is that it must also be included on the employee’s W-2

50 Percent Deductible Meal Expenses

  • When you have a meal with a client while discussing work (however, the dinner must not be “lavish” or else the deduction may be disallowed)
  • Meals are served to the employees at a conference when the meal price is comparatively more than the conference’s ticket price.
  • Employees having a meal while traveling for work.
  • Treating a team of employees by taking them out for a meal. However, if you are taking out more than 50 percent of your workforce for a meal, this meal will be eligible for 100 percent tax-deductible (recall the “company party” rules above).
  • Food served during a board meeting.
  • Dinner that you provide for employees working late.

Restaurant Meals Modifications

What qualifies as a restaurant.

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Reimbursements and allowances for remote workers’ travel expenses

This content was originally published in the Canadian Tax Foundations newsletter: Canadian Tax Focus. Republished with permission.

Travel between an employee’s residence and a regular place of employment (RPE) has long been considered by the Canada Revenue Agency (CRA) to be personal travel and not part of the employee’s office or employment duties; therefore, any reimbursement or allowance relating to this travel is a taxable benefit. Conversely, where travel relating to a location other than an RPE is involved, such payments are non-taxable.

But what is an RPE in this era of remote work? A recent technical interpretation provides that a location used for a one-time, multi-day training session for remote workers is not an RPE for those workers (CRA document no. 2022-0936671I7, June 30, 2022); the CRA therefore concludes that the reimbursements and allowances for travelling there are generally non-taxable. However, the CRA notes one exception: allowances for meals (and presumably lodging) are non-taxable only if the rules for a special work site apply.

The CRA generally comments that whether a location is an RPE is a question of fact. CRA document no. 2012-0432671E5 (August 13, 2012) observes that a location could be an RPE even if the employee works there only once or twice a month, but the location might not be an RPE if the employee works there only once or for a few days during the year. In contrast, CRA document no. 2016-0643631E5 (August 17, 2020) declines to offer an opinion on a situation where an employee works at two different locations on alternating weeks. The 2022 technical interpretation takes more definitive positions, which are favourable to the employee.

The 2022 technical interpretation concerns an employer’s plans to hire new employees who reside far from the employer’s offices. The employees may work from home or designate one of the employer’s offices as their place of work, without requiring regular attendance or reserving an onsite workspace. The employer will also provide the necessary equipment for remote work. In addition, the employees will be required to attend a single three-day event during their employment contract for training and team-building activities. For employees who are required to attend, the employer will reimburse reasonable accommodation and transportation costs (bus, train) or provide a per-kilometre motor vehicle allowance. A meal allowance will also be provided.

The CRA concludes that the work location designated in the employment contract is not considered to be an RPE for the new employees. Therefore, reimbursements of travel expenses do not need to be included in their income under paragraph 6(1)(a). Also, reasonable per-kilometre allowances received by employees for the use of their motor vehicle for travel in the course of performing their duties will not be included in their income by virtue of subparagraph 6(1)(b)(vii.1).

The CRA notes that the situation for meal allowances is different. The exemption in subparagraph 6(1)(b)(vii) for reasonable allowances for travel expenses that are not for the use of a motor vehicle requires that the employee be travelling away from the municipality where the employer’s establishment is located. Since the employee’s home is not such an establishment, this condition is not satisfied. However, the CRA notes that the meal allowance could be non-taxable by virtue of subsection 6(6)—special work site. The CRA agrees that the work to be performed (that is, training and team-building activities) is considered temporary in nature and required as part of the employee’s duties. As such, the amounts paid for travel will not be required to be included in their income if all other conditions of the subsection are met. In particular, the employee must be away from home or at the special work site for at least 36 hours and cannot be expected to return home daily from the special work site because of the distance involved.

Similar reasoning would presumably apply to allowances for lodging expenses, although this issue was not discussed.

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cra travel and entertainment

Can I deduct meals and entertainment costs as business expenses?

The only thing better than enjoying a good meal, is knowing you can also deduct it as a business expense. In an ideal world, we’d love to deduct all of our meals, but in the real world, that’s just not going to happen.

The Canada Revenue Agency (CRA) has specified exactly what can and can’t be claimed. We’ll help you stay on the right side of the rules on claiming meals and entertainment costs as a business expense.

Allowable Expenses at 50%

You’re probably familiar with the “50% limitation” – which says that you can only claim 50% of the actual amount spent on meals and entertainment costs. So a $100 lunch with a client will mean you can only deduct $50 as an expense.

However, note that there is a caveat – the cost that you can deduct is 50% of the lower of: the amount spent, or a reasonable amount. So that $800 steak dinner for two at Jacob’s probably won’t be considered ‘reasonable’ by a CRA auditor. In that case, they will decide that a reasonable dinner for two should be, say $80, and only allow 50% of $80 to be deducted as a business expense.

Here’s what you can deduct as valid meals & entertainment expenses (subject to the 50% limitation):

  • Meals with customers or prospective clients
  • Tickets to a theatre, concert, athletic event (including private boxes) or other performance
  • Cruise tickets
  • Admission to a fashion show
  • Hotel room rentals (hospitality suite)
  • Cost of entertaining guests at clubs (night, athletic/sporting or social)
  • Any amusement, recreation or attendance at any entertainment event, unless it’s specifically disallowed below
  • Security escort or tour guide for a business client

For all of these expenses, you may be required to prove that the amount was spent for the purpose of earning income. Therefore, it’s recommended you keep a record of the customers/prospects that you’re entertaining, relevant dates & times, along with any other vouchers as proof.

Allowable Expenses at 100%

In some very specific situations, you can deduct 100% of the costs for meals/entertainment, i.e. these costs are not subject to the 50% limitation.

  • Amounts billed to clients – if, for example, you’re a consultant who bills your clients for your meals while on their work assignment
  • When your primary business is providing meals/entertainment – Restaurants, hotels that purchase food to provide to their customers
  • Meals purchased for a fundraising event to benefit a registered charity
  • Meals that are included in an employee’s income
  • Office parties – any office lunch/party that the company pays for, where all employees are invited. Limited to 6 events per year.

Disallowed Expenses

  • Costs of recreation facilities and club dues
  • Meals for company executives or partners, with no clients present
  • Season tickets for sporting events (unless you can prove the tickets are a promotional expense)
  • Meals outside your sales territory, or on a vacation
  • Meals taken after a golf game at the club house
  • Expenses that are personal in nature
  • Payments to escort services for “illicit services of a personal nature” (CRA’s words)

We’ve only covered common cases for businesses, and excluded specific situations that typically wouldn’t apply to our clients. So if you’re a long-haul truck driver, bicycle courier or rickshaw driver, you can read more here . If you have a question about a specific cost not covered here, leave a reply below. 

Further Reading

CRA – Information Bulletin IT518R – Food, Beverages and Entertainment Expenses

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Home › Insights › Articles › Exceptions to the 50% Limitation on Meals and Entertainment

Exceptions to the 50% Limitation on Meals and Entertainment

Image of Tom Girone.

Do you struggle determining what meals and entertainment expenses are subject to the 50% limitation? You might not be taking full advantage of the deductions you are entitled to. This article will explain the general rules relating to meals and entertainment, and the exceptions to the 50% limitation. Entertainment expenses that are incurred while entertaining a client, customer or employee are deductible if they are ordinary and necessary. An expense is ordinary if it is common and accepted in your trade or business. An expense is necessary if it is helpful and appropriate for your business.

In addition to being ordinary and necessary, the expenses must meet one of the following tests:

  • Directly-related test
  • Associated test

DIRECTLY-RELATED TEST

When determining if you meet the directly-related test you should ask yourself the following questions:

  • Was the main purpose of the combined business and entertainment the active conduct of business?
  • Did you engage in business discussions with the person during the course of the entertainment?
  • Did you have a general expectation of getting income or other specific benefit at a future time from the entertainment activity?

ASSOCIATED TEST

When determining if you meet the associated test, you must ask yourself the following questions:

  • Is the entertainment associated with the active conduct of your trade or business?
  • Did the entertainment occur directly before or after a substantial business discussion?

Generally, business-related meals and entertainment are subject to a 50% limitation on deductibility.

The 50% limit applies to meals and entertainment incurred while traveling away from home, entertaining customers or attending a business meeting.

EXCEPTIONS TO THE 50% LIMIT

The following describes meals and entertainment expenses that are 100% deductible:

  • Food and Beverages for Employees – Expenses for food and beverages furnished on your business premises primarily for employees. For example, during group meetings, mentoring, on occasion if overtime work is required, during conferences, seminars or training schools.
  • Recreational and Social Expenses for Employees – Recreational, social, or similar activities, or associated facilities incurred primarily for the benefit of employees who are not highly compensated employees. For example, a holiday party, an annual event, a seasonal outing and the cost of renting a bowling alley, swimming pool, charter boat, baseball diamond, etc.
  • Organizational Business Meetings – Business meetings that are directly related to the taxpayer’s employees, stockholders, agents or directors. For example, meetings that introduce new procedures, the election of directors, discussion of corporate affairs or attendance at a conference, training seminar or training school that is not on your business premises.
  • Expenses Treated as Compensation – Meal and entertainment expenses that are included as compensation to the recipient employee.

It is critical that proper records are maintained to substantiate all meals and entertainment deductions. Proper documentation includes a record of the time and place, business purpose and the relationship to the party being entertained.

If you have any questions, please contact your Withum professional, a member of Withum’s National Tax Services Group or email us at [email protected] .

To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

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Travel meals vs Meals and Entertainment expenses

A corporate taxpayer has categorized some meals in the Meals and Entertainment category and some in Travel meals .

According to the CRA travel meals belong in the category of Travel expenses on line 9200 . https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/completing-form-t2125/line-9200-travel.html The link is for T2125 and this scenario is for an incorporated business but the GIFI code is 9200 as well on the T2.

  • The 50% limit applies to the cost of meals.

My question is do others enter these travel meals on line 9200 or group them with on line 8523 Meals and entertainment?

If the 50% limit applies, I group them with line 8523. That way the 50% is automatically calculated on Schedule 1.

On the financial statements I group them with Travel, and on the GIFI i use the meals and entertainment code 8523 for the automatic calculation.

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Your 2023 tax guide to entertainment and meal deductions.

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Can you still take the meal deduction in 2023?

Tax planning is a major part of owning and running a successful business. The meals and entertainment tax deductions have been a valuable way for many small-business owners to reduce their tax liabilities each year. Sadly, the value of the meal deduction will be cut in half for 2023 from the 2022 deduction levels.

Keep reading as we share the ins and outs of the meal and entertainment deduction for 2023. This information can help you take advantage of these valuable money-saving tax deductions. A few of you reading this have given up your office spaces and are conducting many of your meetings out and about at restaurants.

How Business Owners Deduct Meals And Entertainment

The value of the meals and entertainment tax deductions has changed over the past few years. With the ratification of the 2018 Tax Cuts and Jobs Act (TCJA) , aka the Trump Tax Plan, you can no longer deduct entertainment expenses. The ticket cost is no longer deductible if you like to entertain at sporting events or treat your clients to a Broadway show.

There are other ways to deduct some expenses that qualify for a Meals and Entertainment Tax deduction.

Group of business people having coffee and chatting in office cafeteria

2023 Meals and Entertainment Allowable Deductions

It is probably more helpful to discuss what can still qualify for the meals and entertainment tax deduction in 2023. Here are some potential tax deductions that may be between half to fully deductible.

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  • Business meals with clients (50%)
  • Food items for the office (50%)
  • Meals while traveling for work (50%)
  • Meals at a conference (50%)
  • Food for company holiday parties (100%)
  • Food and beverages given to the public (100%)
  • Dinner for employees working late at the office (100%) ‍

Your Guide to Meal Deductions For 2023

For 2023, most business meals are just 50% deductible, according to the IRS rule. Let’s say you take your favorite client to a wonderful dinner (to discuss business); you can deduct half the cost of the meal. On the other hand, if you go out for a meal with a client with no business purpose, the meal is not deductible.

To add to the confusion, meals were 100% deductible in 2021 and 2022. This was a temporary change to help boost spending at restaurants during the Covid-19 pandemic.

How To Document Your Meal Tax Deductions

Suppose you are looking to deduct a business meal that costs more than $75; you are required to keep receipts or documentation of the meal expense. For meals below $75, the IRS has no specific requirement to keep receipts to document the expense. Either way, you will still want to keep a record of your deductible meal, including the following information: date of the meal, total including tax and tip, name of the restaurant, details of the business meal (who attended and how it related to your business).

For the most part you won't be able to deduct entertaining clients at converts in 2023.

Your Guide To Entertainment Deductions

We previously mentioned that most entertainment expenses are no longer deductible.

Here are some of the most common exceptions that may still be tax deductible in 2023—expenses for events like the company holiday party or rewards trip; or costs tied to business meetings (think chamber meetings, professional associations, or even a conference). Also, if you sell entertainment to your customers, there are exceptions to the entertainment deductions. For example, if a bar owner pays a band to perform for customers, this would likely be a deductible business expense.

Christmas Festival

This is the most favourite festival of Muscovites and guests of the city. Interesting events take place at 80 venues throughout the city. Numerous ice rinks, food zones, hockey courts, slides, a children’s snowboard park are open. Every day, in special chalets around the city, puppet shows and fairy tales are read. Concerts and master classes await visitors, where you can try yourself in Gzhel painting, clay modelling, decoupage. You can make jewellery, toys and gifts to loved ones, as well as send a letter to Santa Claus. On Red Square, everyone is interested in not only skating on the rink themselves, but also enjoying the colourful ice show from the famous Russian skaters.

Festival “Moscow Maslenitsa”

One of the brightest, longest events in Russia, dedicated to the seeing off of winter and the meeting of spring. Everyone will be able to learn how to cook pancakes, attend a lot of creative and craft workshops. Take part in traditional Shrovetide fun. Build a huge stuffed animal from straw and burn it, ride on crusts, take part in a masquerade parade. At numerous venues it will be possible to see street performances and performances by the best vocal ensembles and folk artists.

International exhibition NEFTEGAZ-2022

Neftegaz (Oil and gas exhibition) is the largest exhibition in Russia, which is one of the ten most significant in the industry. Lots of business meetings. Sighning of contracts. Experience exchange. The exhibition is attended by over 500 companies from around the world.

Moscow International Film Festival

The film festival has been held since 1935. Second oldest after the Venice Film Festival. Moscow International Film Festival is one of the most important events in the film industry. This is not only an influential professional venue, but also an interesting event for muscovites and guest of the city.

Easter Gift Festival

Easter festival is one of the most striking and major events of the city in April. Guests and residents of the city will be able to learn about the traditions of Easter, taste various options for Easter cakes, try other holiday treats. And also take part in charity events.

The solemn ceremony of the changing of the guard at the walls of the Moscow Kremlin

The ceremony is held every Saturday at 12.00 on the Cathedral Square of the Kremlin. This is a colourful sight introducing Russian military traditions. Every year, the organizers introduce new elements into the program, preserving the classic part. To enter the territory of the Kremlin, an entrance ticket is required.

Russia Victory Day in the Great Patriotic War 1941-1945

In May 9th Russia celebrate the day of victory of Soviet troops over Nazi Germany. On this day, parades, commemorative events, and festive fireworks are held solemnly throughout the country. The main military parade of the country takes place in Moscow on Red Square. Throughout the city, at special concert venues, art groups perform, songs of the war years are heard everywhere. People dance, relax. Many older people cry, remembering the horror of years gone by.

Night of museums

Museum Night is an annual project that will take place in Moscow 15 times. Most of the city’s cultural institutions traditionally take part in it. Most of the city’s museums and exhibitions are free to visit. In parks, country estates, thematic performances and entertainment cultural events are held. About 200 museums, exhibition halls and art spaces take part in the festival. Many sites prepare special projects on the topic for visitors.

Fish Week festival

This year the festival will be held in Moscow for the sixth time. Everyone can taste a variety of seafood dishes, as well as purchase fish, shrimp, caviar «take away”. Every day, gastronomic shows and various master classes for both adults and children will be held at the festival venues.

A cappella Moscow Spring international festival

Bright and talented performers and bands from different countries come to Moscow to demonstrate all their singing a cappella skills. The show takes place at different open-air scenes in the center of Moscow. Everyone can visit any city concerts, creative workshops, music, theatre performances.

Horse racing events

In Moscow, the racing season lasts from May to September. Purebred racehorse competitions are held at the Central Moscow Hippodrome. Throughout the entire period, horses demonstrate all their power, beauty and strength. By tradition, in the spring a big holiday is held, dedicated to the opening of the race.

Day of Russia holiday

On this day, all cities of the country host ceremonies, entertainment programs, holiday concerts with the participation of popular performers. Everyone can participate in sports and youth flash mobs, visit museums and improvised fairs. And the culmination of the holiday will be a big fireworks.

Flower Jam Festival

Within the framework of the festival, the international competition of urban landscape design of the same name takes place. The task of the contestants is to come up with gardens, compositions that will beneficially affect the emotional and physical condition of the city residents. Across the city will appear compositions of fresh flowers. The city is blooming.

International Festival "Russian Cuisine"

This year the festival of Russian cuisine will be held for the forth time. Guests will be able to taste a wide palette of dishes from multinational Russia. Appreciate the skills of the best chefs in Russia. Taste ready-made dishes according to old Russian recipes. The largest outdoor food court in Moscow will open. Performances of famous pop singers and folk artists will complement the holiday atmosphere.

International Fireworks Festival Rostec

The largest festival of pyrotechnic art in Russia. The strongest pyrotechnics from different countries gather to show the audience all their highest skills and compete for the title of best. A diverse program is provided for guests and residents of the city: creative and sporting events, thematic spaces, quests and games, performances by musical groups and much more.

International Military Music Festival Spasskaya Tower

This holiday festival takes place on Red Square. This is one of the most ambitious and vibrant events of the year. Spectators are waiting for the parade of military bands, musical groups from around the world. Music from classical to pop sounds in the city center. Military bands from many countries demonstrate entire dance performances, performances with weapons. Colorful laser and pyrotechnic shows decorate this event. The grand fireworks on the closing day are unforgettable.

Moscow City day

Bright, large-scale and spectacular holiday. In 2022, Muscovites will celebrate the 875th anniversary of their city. Moscow greets this day on a grand scale. The whole city is seething. At various venues there are concerts and live music. Sports competitions for families, fairs for all are held. Everywhere – an atmosphere of joy and emancipation.

Moscow Balloon Festival

The festival will be held at the Expocentre on Krasnaya Presnya. This is the largest festival in Europe in terms of the number of participants, guests and sponsors. The best professional graphic designers from all over the world compete here. The program includes: an air show, master classes, an exhibition of sculptures from balloons, as well as exciting seminars from professional aero designers.

XI Moscow International Festival Circle of Light

One of the largest light festivals in the world. Grand multimedia shows await guests and residents: 3D mapping, pyrotechnic effects using high-altitude fountains, fire flames, laser projections. Many light installations of fireworks with musical accompaniment.

XVIII Moscow Gastronomic Festival

Hundreds of restaurants in Moscow present a signature tasting menu. It offers new tastes, unusual food combinations, bold culinary experiments. Special brunches take place all month. The city has a lot of thematic entertainment, promotions from the partners of the festival. At the end of the festival, a magnificent ball is held at which members of the international jury will choose the winner.

National Unity Day of Russia

In Moscow, the program of this general public holiday is especially solemn and vibrant. A variety of patriotic events, rallies, parades are held. In the evening, festive concerts of pop stars and musical groups will take place.

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Business expenses

This page discusses the more common expenses you might incur to earn income from your activities. Incur means you paid or will pay the expense.

The amount you can deduct in a given year for any expense depends if it is considered a current year expense or capital expense. For more information, go to Current or capital expenses and Basic information about capital cost allowance (CCA) .

You cannot claim expenses you incur to buy capital property. However, as a rule, you can deduct any reasonable current expense you incur to earn income. The deductible expenses include any GST/HST you incur on these expenses minus the amount of any input tax credit claimed.

Also, since you cannot deduct personal expenses, enter only the business part of expenses on Form T2125 , T2042 or T2121.

When you claim the GST/HST you paid or owe on your business expenses as an input tax credit, reduce the amounts of the business expenses by the amount of the input tax credit. Do this when the GST/HST for which you are claiming the input tax credit was paid or became payable, whichever is earlier.

Similarly, subtract any other rebate, grant or assistance from the expense to which it applies. Enter the net figure on the appropriate line of your form. Any such assistance you claim for the purchase of depreciable property used in your business will affect your claim for capital cost allowance .

Note for farmers

If you cannot apply the rebate, grant or assistance you received to reduce a particular expense, or to reduce an asset's capital cost, include the total on line 9570 , "Rebates," on Form T2042 . For more information, go to Grants, subsidies and rebates .

Note for business and professional

If you cannot apply the rebate, grant or assistance you received to reduce a particular expense, or to reduce an asset's capital cost, include the total in Part 3C at line 8230 , "Other income," on Form T2125 . For more information, go to Grants, subsidies and rebates .

The following may be considered when determining operating expenses:

  • advertising
  • allowance on eligible capital property
  • business start-up costs
  • business tax, fees, licenses and dues
  • business-use-of-home expenses
  • capital cost allowance
  • delivery, freight and express
  • fuel costs (except for motor vehicles)
  • fees, penalties or bonuses paid for a loan
  • fees deductible over five years
  • fees deductible in the year incurred
  • interest deductible on property no longer used for business purposes
  • interest on loans made against insurance policies
  • capitalizing interest
  • interest related to workspace in your home
  • legal, accounting and other professional fees
  • maintenance and repairs
  • management and administration fees
  • long-haul truck drivers
  • extra food and beverages consumed by self-employed
  • motor vehicle expenses
  • office expenses
  • other business expenses
  • prepaid expenses
  • property taxes
  • salaries, wages and benefits (including employer's contributions)
  • telephone and utilities

Advertising

You can deduct expenses for advertising, including advertising in Canadian newspapers and on Canadian television and radio stations. You can also include any amount you paid as a finder's fee.

To claim the expenses, you must meet certain Canadian content or Canadian ownership requirements. These requirements do not apply if you advertise on foreign websites.

Restrictions apply to the amount of the expense you can deduct for advertising in a periodical:

  • You can deduct all the expense if your advertising is directed at a Canadian market and the original editorial content in the issue is 80% or more of the issue's total non-advertising content.
  • You can deduct 50% of the expense if your advertising in a periodical is directed at a Canadian market and the original editorial content in the issue is less than 80% of the issue's total non-advertising content.

You cannot deduct expenses for advertising directed mainly at a Canadian market when you advertise with a foreign broadcaster.

Allowance on eligible capital property

As of January 1, 2017 , the eligible capital property (ECP) system was replaced with the new capital cost allowance (CCA) Class 14.1 with transitional rules. For more information, go to Class 14.1 (5%) .

You can generally deduct an amount for a bad debt if:

  • you had determined that an account receivable is a bad debt in the year
  • you had already included the receivable in income

Business start-up costs

To deduct a business expense, you need to have carried on the business in the fiscal period in which the expense was incurred. You have to be clear about the date your business started.

Where a taxpayer proposes to undertake a business and makes some initial expenditures with that purpose in mind, it is necessary to establish whether the expenditure preceded the start of the business or whether the business had in fact begun and there were expenses incurred during preliminary steps leading to the start of normal operations.

Consequently, the date when the business can be said to have commenced must be known.

Determining what you can claim as a start-up expense can be difficult. For more information, go to Interpretation Bulletin IT-364, Commencement of Business Operations , or see  Guide RC4022, General Information for GST/HST Registrants .

Business tax, fees, licences and dues

You can deduct any annual licence fees and some business taxes you incur to run your business.

You can also deduct annual dues or fees to keep your membership in a trade or commercial association, as well as subscriptions to publications.

You cannot deduct club membership dues (including initiation fees) if the main purpose of the club is dining, recreation or sporting activities.

Delivery, freight and express

You can deduct the cost of delivery, freight and express incurred in the year that relates to your business.

Fuel costs (except for motor vehicles)

You can deduct the cost of fuel (including gasoline, diesel and propane), motor oil and lubricants used in your business.

For information about claiming the fuel used in your motor vehicle, go to Motor vehicle expenses .

The cost of fuel related to  business use of workspace in your home has to be claimed as business-use-of-home expenses .

You can deduct all ordinary commercial insurance premiums you incur on any buildings, machinery and equipment you use in your business.

The insurance costs related to your motor vehicle have to be claimed as motor vehicle expenses .

The insurance costs related to business use of workspace in your home have to be claimed as business-use-of-home expenses .

In most cases, you cannot deduct your life insurance premiums. However, if you use your life insurance policy as collateral for a loan related to your business, including a fishing business, you may be able to deduct a limited part of the premiums you paid. For more information, go to Interpretation Bulletin IT-309, Premiums on Life Insurance Used as Collateral .

Insurance expenses for fishers

Enter the premiums you paid to insure your fishing boat and equipment.

In most cases, you cannot deduct the amounts you paid to insure personal property such as your home or car. However, if you used the property for personal use and for your fishing business, you can deduct the business part of these costs. For more information, go to  Motor vehicle expenses (not including CCA) and Business-use-of-home expenses .

Interest and bank charges

You can deduct interest incurred on money borrowed for business purposes or to acquire property for business purposes. However, there are limits on:

  • the interest you can deduct on money you borrow to buy a passenger vehicle or a zero-emission passenger vehicle. For more information, go to Motor vehicle expenses .
  • the amount of interest you can deduct for vacant land. Usually, you can only deduct interest up to the amount of income from the land that remains after you deduct all other expenses. You cannot use any remaining amounts of interest to create or increase a loss, and you cannot deduct them from other sources of income.
  • the interest you paid on any real estate mortgage you had to earn fishing income. You can deduct the interest, but you cannot deduct the principal part of loan or mortgage payments. Do not deduct interest on money you borrowed for personal purposes or to pay overdue income taxes.

Fees, penalties or bonuses paid for a loan

You can deduct the fee you pay to reduce the interest rate on your loan. You can also deduct any penalty or bonus a financial institution charges you to pay off your loan before it is due. Treat the fee, penalty or bonus as prepaid interest and deduct it over the remaining original term of your loan.

For example, if the term of your loan is five years and in the third year you pay a fee to reduce your interest rate, treat this fee as a prepaid expense and deduct it over the remaining term of the loan. For more information, see  Prepaid expenses .

Fees deductible over five years

You can deduct certain fees you incur when you get a loan to buy or improve your business property. These fees include:

  • application, appraisal, processing and insurance fees
  • loan guarantee fees
  • loan brokerage and finder's fees
  • legal fees related to financing

You deduct these fees over a period of five years, regardless of the term of your loan. Deduct 20% (100% divided by five years equals 20%) in the current tax year and 20% in each of the next four years. The 20% limit is reduced proportionally for fiscal periods of less than 12 months.

However, if you repay the loan before the end of the five-year period, you can deduct the remaining financing fees then. The number of years for which you can deduct these fees is not related to the term of your loan.

Fees deductible in the year incurred

If you incur standby charges, guarantee fees, service fees or any other similar fees, you may be able to deduct them in full in the year you incur them. To do so, they have to relate only to that year. For more information, go to Interpretation Bulletin IT-341, Expenses of Issuing or Selling Shares, Units in a Trust, Interests in a Partnership or Syndicate and Expenses of Borrowing Money .

Interest deductible on property no longer used for business purposes

You may be able to deduct interest expenses for a property you used for business purposes, even if you have stopped using the property for such purposes because you are no longer in business. For more information, go to Income Tax Folio S3-F6-C1, Interest Deductibility .

Interest on loans made against insurance policies

You can deduct interest you paid on a loan made against an insurance policy, as long as the insurer didn't add the interest you paid to the adjusted cost base of the insurance policy. To claim the interest you paid for the year, have the insurer verify the interest before June 16 of the following year on Form T2210, Verification of Policy Loan Interest by the Insurer .

Capitalizing interest

You can choose to capitalize interest on money you borrow either:

  • to buy depreciable property
  • to buy a resource property
  • for exploration and development

When you choose to capitalize interest, add the interest to the cost of the property or exploration and development costs instead of deducting the interest as an expense.

Interest related to workspace in your home

The interest related to business use of workspace in your home has to be claimed as business-use-of-home expenses .

Legal, accounting and other professional fees

You can deduct the fees you incurred for external professional advice or services, including consulting fees.

You can deduct accounting and legal fees you incur to get advice and help with keeping your records. You can also deduct fees you incur for preparing and filing your income tax and GST/HST returns.

You can deduct accounting or legal fees you paid to have an objection or appeal prepared against an assessment for income tax, Canada Pension Plan  or Quebec Pension Plan  contributions, or employment insurance premiums. However, the full amount of these deductible fees must first be reduced by any reimbursement of these fees that you have received. Enter the difference on line 23200, Other deductions , of your income tax return ( line 23200 was line 232 before tax year 2019).

If you received a reimbursement in the tax year, for the types of fees that you deducted in a previous year, report the amount you received on line 13000, Other income , of your income tax return of the current year ( line 13000 was line 130 before tax year 2019).

You cannot deduct legal and other fees you incur to buy a capital property, such as a boat or fishing material. Instead, add these fees to the cost of the property. For more information on capital property, go to Claiming capital cost allowance (CCA) .

For more information, go to Interpretation Bulletin IT-99, Legal and Accounting Fees .

Maintenance and repairs

You can deduct the cost of labour and materials for any minor repairs or maintenance done to property you use to earn business income.

However, you cannot deduct any of the following:

  • the value of your own labour
  • the costs you incur for repairs that are capital in nature ( capital expense )
  • the costs you incur for repairs that have been reimbursed by your insurance company

For repairs that are capital in nature, you can claim a capital cost allowance .

You have to claim the maintenance and repairs related to business use of workspace in your home as business-use-of-home expenses .

Note for daycares

You can only deduct maintenance and repair expenses if you can prove that the day to day running of your daycare is what caused any damage and you have not received any compensation or refund from your insurer.

Management and administration fees

You can deduct management and administration fees, including bank charges, incurred to operate your business. Bank charges include those for processing payments.

Do not include :

  • employees' salaries, wages and benefits (including employer's contributions)

Instead, report these amounts separately.

Meals and entertainment (allowable part only)

The maximum amount you can claim for food, beverages and entertainment expenses is 50% of the lesser of the following amounts:

  • the amount you incurred for the expenses
  • an amount that is reasonable in the circumstances

These limits also apply to the cost of your meals when you travel or go to a convention, conference or similar event. However, special rules can affect your claim for meals in these cases. For more information, see  Travel .

These limits do not apply if any of the following apply:

  • Your business regularly provides food, beverages or entertainment to customers for compensation (for example, a restaurant, hotel or motel).
  • You bill your client or customer for the meal and entertainment costs, and you show these costs on the bill.
  • You include the amount of the meal and entertainment expenses in an employee's income or would include them if the employee did not work at a remote or special work location. In addition, the amount cannot be paid or payable for a conference, convention, seminar or similar event and the special work location must be at least 30 kilometres from the closest urban centre with a population of 40,000 or more. For more information about urban centres, go to Statistics Canada's Population and Dwelling Count Highlight Tables .
  • You incur meal and entertainment expenses for an office party or similar event, and you invite all your employees from a particular location. The limit is six such events per year.
  • You incur meal and entertainment expenses for a fund-raising event that was mainly for the benefit of a registered charity.
  • You provide meals to an employee housed at a temporary work camp constructed or installed specifically to provide meals and accommodation to employees working at a construction site (note that the employee cannot be expected to return home daily).

Entertainment expenses include tickets and entrance fees to an entertainment or sporting event, gratuities, cover charges, and room rentals such as hospitality suites. For more information, go to Interpretation Bulletin IT-518, Food, Beverages and Entertainment Expenses .

Meals and entertainment expenses for fishers

Claim the total amount you paid for food you stocked on your boat to feed your crew when you fished offshore.

Often, inshore fishers do not stock food. Instead, they bring meals from home for their crew because the trips are short (leave home early in the morning and come back late in the afternoon). You can deduct the cost of these meals as long as the meals were a taxable benefit to your crew.

In some cases, you can deduct the cost of meals even though they were not taxable benefits. You can do this if your boat was at sea for 36 hours or more and the meals you provided for your crew were not taxable benefits. Also, if you gave meals to your sharespeople, generally the meals you provided for them are not taxable benefits because we do not consider sharespeople to be employees. The 50% rule applies to all  self-employed sharespeople. However, they may be limited by the restriction noted above.

For more information about taxable benefits, see the  T4130, Employers' Guide – Taxable Benefits and Allowances .

Long-haul truck drivers

Expenses for food and beverages consumed by a long-haul truck driver during an eligible travel period are deductible at 80%.

An eligible travel period is a period of at least 24 continuous hours throughout which the driver is away from the municipality and metropolitan area that he or she resides in (the residential location) and is driving a long-haul truck that transports goods to or from a location that is beyond a radius of at least 160 kilometres from the residential location.

Extra food and beverages consumed by self-employed

This information is for self-employed:

  • bicycle couriers
  • rickshaw drivers

They can deduct the cost of the extra food and beverages they must consume in a normal working day (eight hours) because of the nature of their work.

The daily flat rate that can be claimed is $23.

If you are claiming this deduction you should be prepared to provide logbooks showing the days worked and the hours worked on each of these days during the tax year. The CRA may also ask for dispatch slips or other documents to support the days worked during the tax year.

By using this flat-rate deduction, you will not be required to maintain or submit receipts for the extra meal and beverage consumed.

If you want to claim more than the flat-rate amount, the CRA will also need:

  • supporting receipts for all food and beverages claimed
  • something that clearly shows the extra amount of food and beverages required because of the nature of your work, and how this amount exceeds what the average person would consume in terms of both cost and quantity

Office expenses

You can deduct the cost of office expenses. These include small items such as:

  • paper clips

Office expenses do not include items such as:

  • calculators
  • filing cabinets

These are capital items.

Prepaid expenses

A prepaid expense is an expense you pay ahead of time. Under the accrual method of accounting , claim any expense you prepay in the year or years in which you get the related benefit.

Suppose your fiscal year-end is December 31, 2022 . On June 30, 2022 , you prepay the rent on your store for a full year ( July 1, 2022, to June 30, 2023 ). You can only deduct one-half of this rent as an expense in 2022. You deduct the other half as an expense in 2023.

Under the cash method of accounting , you can't deduct a prepaid expense amount (other than for inventory) relating to a tax year that is two or more years after the year the expense is paid.

However, you can deduct the part of an amount you paid in a previous year for benefits received in the current tax year. You can deduct these amount as long as you have not previously deducted them.

If you paid $600 for a three-year service contract for office equipment in 2022, you can deduct $400 in 2022. This represents the part of the expense that applies to 2022 and 2023. On your 2024 income tax return, you could then deduct the balance of $200 for the part of the prepaid lease that applies to 2024.

For more information, go to Interpretation Bulletin IT-417, Prepaid Expenses and Deferred Charges .

Property taxes

You can deduct property taxes you incurred for property used in your business. For example, you can deduct property taxes for the land and building where your business is situated.

The property tax related to business use of workspace in your home has to be claimed as business-use-of-home expenses .

You can deduct rent incurred for property used in your business. For example, you can deduct rent for the land and building where your business is situated.

The rent expense related to business use of workspace in your home has to be claimed as business-use-of-home expenses .

Salaries, wages and benefits (including employer's contributions)

Ask for a cpp/ei ruling on employment status.

If you or a person working for you is not sure of the worker's employment status (employee or self-employed), either of you can ask the CRA for a CPP / EI ruling to have the status determined and whether the employment is pensionable, insurable, or both. The ruling can also determine if the earnings are pensionable, insurable, or both. For more information, go to How to get a CPP/EI ruling .

For information on employment status, go to Canada Pension Plan and Employment Insurance Rulings  and see Guide RC4110, Employee or Self-Employed

Amounts you can deduct as an employer

You can deduct gross salaries and other benefits you pay to employees.

  • salaries and wages such as direct wage costs or subcontracts
  • drawings of the owners of the business
  • salaries or drawings of the owners of the business since salaries or drawings paid or payable to you or your partners are not deductible

The Canada Pension Plan  is for all workers, including the self-employed. Employers , employees and most self-employed individuals must contribute to the CPP . The CPP can provide basic benefits when you retire or if you become disabled. When you die, the CPP can provide benefits to your surviving spouse or common-law partner and your dependent children under 25. For more information on contribution and benefits, visit  Service Canada .

Quebec workers including the self-employed are covered under the Quebec Pension Plan .

As the employer, you can deduct your part of the following amounts payable on employees' remuneration:

  • CPP or QPP contributions
  • employment insurance (EI) premiums
  • Provincial parental insurance plan premiums, which is an income replacement plan for residents of Quebec (visit Revenu Québec for details)
  • workers' compensation amounts for your employees

You report each salary by the end of February on a T4 slip, Statement of Remuneration Paid, or T4A slip, Statement of Pension, Retirement, Annuity and Other Income.

You can also deduct any premiums you pay for an employee for a sickness, an accident, a disability or an income insurance plan. For more information on these slips, see  T4001, Employer's Guide – Payroll Deductions and Remittances , and go to Payroll .

You can deduct the salary you pay to your child, as long as you meet all these conditions:

  • you pay the salary
  • the work your child does is necessary for earning business, professional or fishing income
  • the salary is reasonable when you consider your child's age, and the amount you pay is what you would pay someone else

Keep documents to support the salary you pay your child. If you pay your child by cheque, keep the cancelled cheque. If you pay cash, have the child sign a receipt.

Instead of cash, you can pay your child with a product from your business. When you do this, claim the value of the product as an expense and add to your gross sales an amount equal to the value of the product. Your child has to include the value of the product in his or her income.

You can also deduct the salary you pay to your spouse or common-law partner . When you pay your spouse or common-law partner a salary, use the same rules that apply to paying your child.

Report the salaries you pay to your children and spouse or common-law partner on T4 slips, the same as you would for other employees. However, you cannot claim as an expense the value of board and lodging you provide to your dependent children and your spouse or common-law partner.

For more information, see Guide RC4120, Employers' Guide – Filing the T4 Slip and Summary .

You can deduct the cost of items the business used indirectly to provide goods or services (for example, drugs and medication used in a veterinary operation, or cleaning supplies used by a plumber).

Telephone and utilities

You can deduct expenses for telephone and utilities, such as gas, oil, electricity, water and cable, if you incurred the expenses to earn income.

The expenses for utilities that are related to business use of workspace in your home have to be claimed as business-use-of-home expenses .

You can deduct travel expenses you incur to earn business and professional income. Travel expenses include:

  • public transportation fares
  • hotel accommodations

In most cases, the 50% limit applies to the cost of meals, beverages and entertainment when you travel. For more information, see  Meals and entertainment (allowable part only) .

The 50% limit also applies to the cost of food and beverages served and entertainment enjoyed when you travel on an airplane, train or bus, when the ticket price does not include such amounts.

Forms and publications

  • Form T2125, Statement of Business or Professional Activities
  • Form T2121, Statement of Fishing Activities
  • Form T2042, Statement of Farming Activities

Related link

  • Accounting methods

Page details

Moscow, Idaho

Arts & Entertainment

We have performing arts theaters in historic venues. We have dozens of museums and galleries filled with original ideas. We have one of the most-beloved jazz festivals in the nation. It’s part and parcel for a city that attracts people who naturally think outside the box.

1912 Center

412 E. Third St. Moscow, ID 83843

(208) 669-2249

Appaloosa Horse Museum

2720 Pullman Rd, Moscow, ID 83843, USA

(208) 882-5578

Artisans at the Dahmen Barn, Uniontown

419 N Pkwy, Uniontown, WA 99179, USA

(509) 229-3414

Charles R. Conner Museum, WSU

Charles R. Conner Museum is one of the most popular of the several museums housed on the campus of Washington State University in Pullman. Conner Museum’s public exhibit has the largest display of taxidermy mounts of birds and mammals in the Pacific Northwest. WSU Campus, Pullman, 509-335-3515. Open 7 days/week 8 a.m. – 5 p.m.

125 Abelson Hall, WSU, Pullman, WA

(509) 335-3515

Hartung Theater

875 Perimeter Drive, Moscow, ID 83844, USA

(208) 885-6111

Kenworthy Performing Arts Center

Join the Kenworthy for everyone’s favorite summer tradition! The Saturday Market Cartoons are every Saturday, June through September from 9AM to noon.

508 S Main St, Moscow, ID 83843, USA

(208) 882-4127

Lionel Hampton Jazz Festival

Since the 1960s, the University of Idaho Lionel Hampton Jazz Festival is one of the largest and oldest educational jazz festivals in the world. With over 400 student performances, a dozen world-class jazz artists and nearly 100 workshops, clinics and special exhibits, the Lionel Hampton Jazz Festival honors the music, dance and history of jazz music and one of its most honored artists, Lionel Hampton. February 28-29. 2020

Moscow, ID, USA

(208) 885-5900

McConnell Mansion

110 S Adams St, Moscow, ID 83843, USA

(208) 882-1004

Moscow Contemporary

414 S Main St, Moscow, ID 83843, USA

Moscow Wild At Art

118 E 3rd St, Moscow, ID, USA

(208) 669-2425

Rendezvous in the Park

East City Park, Moscow, ID, USA

Third Street Gallery

206 W 3rd St, Moscow, ID 83843, USA

(208) 883-7036

Washington State University Museum of Art

7301, 1535 Wilson Rd, Pullman, WA

(509) 335-1910

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COMMENTS

  1. Line 8523

    The maximum amount you can claim for food, beverages, and entertainment expenses is 50% of the lesser of the following amounts: When you claim expenses on this line, you will have to calculate the allowable part you can claim for business use. These limits also apply to the cost of your meals when you travel or go to a convention, conference ...

  2. Line 9200

    You can deduct travel expenses you incur to earn business and professional income.Travel expenses include: public transportation fares; hotel accommodations; meals; In most cases, the 50% limit applies to the cost of meals, beverages, and entertainment when you travel. For more information, go to Line 8523 - Meals and entertainment.. The 50% limit also applies to the cost of food and ...

  3. Meal and vehicle rates used to calculate travel expenses for 2022

    Meal expenses. If you choose the detailed method to calculate meal expenses, you must keep your receipts and claim the actual amount that you spent. If you choose the simplified method, claim in Canadian or US funds a flat rate of $23 per meal, to a maximum of $69 per day (sales tax included) per person, without receipts.

  4. The Canada Revenue Agency (CRA) Guidelines for Tax Deduction on Meals

    The CRA's 50 Percent Rule in Relation to Meals & Entertainment. As per the Canada Revenue Agency "The maximum amount you can claim for food, beverages, and entertainment expenses is 50% of the lesser of the following amounts: ü The amount you incurred for the expenses or ü An amount that is reasonable in the circumstances Simply put, the ...

  5. How to Document Meal and Travel Expenses

    The first way to document your meal expenses is with the detailed method. If you use this method, you need to keep all your receipts and claim the actual amount you spent. Keeping receipts every time you dine out can be a lot of work, and the CRA expects actual receipts for your business expenses, not bank or credit card statements.

  6. How to Write-off Business Meal Expenses: CRA Rules Explained

    First of all, you need to know that the CRA limits the amount you can deduct for meals and entertainment expenses to 50% of the actual cost or a reasonable amount, whichever is less. This means that if you spend $100 on a business lunch with a client, you can only claim $50 as a deduction. The same applies if you buy tickets to a show or a game ...

  7. How to Expense Mileage, Entertainment & Meals

    Entertainment Expenses. Taking clients and suppliers out for food and drinks is a regular business practice in Canada, and the CRA lets you deduct much of the cost of this on your taxes. Entertainment expenses are often harder to verify than mileage-related expenses, which makes accurate tracking all the more important here.

  8. Meal & Travel Expenses for Corporate Tax Filing

    Yes, there is a limit to meal expenses when filing taxes with the CRA, and it depends on the method chosen to calculate the expenses. If using the simplified method, the limit is $23 per meal, to a maximum of $69 per day per person. However, if using the detailed method, the limit is the actual amount spent, with receipts required as documentation.

  9. Properly Substantiated Meal and Entertainment Expenses Are Deductible

    Taking into account the $25 limit for gifts and the 50 percent limitation on entertainment expenses, it's generally better to treat a ticket expense as entertainment when it is over $50. For example, you gave a client ballet tickets that cost $140. If you deduct them as a gift expense, your deduction is limited to $25.

  10. How to write off business travel and not trigger red flags with the CRA

    List of travel expenses. Here are some examples of business travel deductions you can claim if you have determined the travel is for business purposes: Plane, train, and bus tickets between your home and your business destination. Baggage fees. Laundry and dry cleaning during your trip. Rental car costs. Hotel and Airbnb costs. 50% of eligible ...

  11. Food and Entertainment Expenses Are Not Always Limited to 50%

    Meals and entertainment expenses are no exception; the general rule is that the maximum amount you can claim for food, beverages, and entertainment expenses is 50% of either the amount you incur or an amount that is reasonable in the circumstances, whichever is less. But that's not always the case.

  12. How to Claim Meals and Entertainment Expenses

    If the meal and entertainment expenses are incurred for a fund-raising event held for the benefit of a registered charity. A business that regularly provides food, beverages and entertainment for compensation (e.g. restaurant or hotel) can claim 100% of these costs. Self-employed foot and bicycle couriers can deduct 100% of the cost of the ...

  13. 2022 Tax Changes: Are Meals and Entertainment Deductible?

    Meals and entertainment that are included in the compensation. 100% deductible. So, if you are a business owner having dinner with a client at a restaurant, this meal will be 100% tax-deductible (at least for 2022!). On the other hand, if you are serving lunch to a client but purchased the meal from a grocery store, this meal will be eligible ...

  14. Travelling expenses

    For more information about travelling expenses, read Archived Interpretation Bulletin IT-522R, Vehicle, Travel and Sales Expenses of Employees, and Archived Interpretation Bulletin IT-518R, Food, Beverages and Entertainment Expenses.. Completing your tax return. Include these expenses on the Food, beverages, and entertainment expenses line (8523) of Form T777, Statement of Employment Expenses ...

  15. Reimbursements and allowances for remote workers' travel expenses

    This content was originally published in the Canadian Tax Foundations newsletter: Canadian Tax Focus. Republished with permission. Travel between an employee's residence and a regular place of employment (RPE) has long been considered by the Canada Revenue Agency (CRA) to be personal travel and not part of the employee's office or employment duties; therefore, any reimbursement or ...

  16. Can I deduct meals and entertainment costs as business expenses?

    Allowable Expenses at 50%. You're probably familiar with the "50% limitation" - which says that you can only claim 50% of the actual amount spent on meals and entertainment costs. So a $100 lunch with a client will mean you can only deduct $50 as an expense. However, note that there is a caveat - the cost that you can deduct is 50% of ...

  17. Exceptions to the 50% Limitation on Meals and Entertainment

    EXCEPTIONS TO THE 50% LIMIT. The following describes meals and entertainment expenses that are 100% deductible: Food and Beverages for Employees - Expenses for food and beverages furnished on your business premises primarily for employees. For example, during group meetings, mentoring, on occasion if overtime work is required, during ...

  18. Travel meals vs Meals and Entertainment expenses

    A corporate taxpayer has categorized some meals in the Meals and Entertainment category and some in Travel meals. According to the CRA travel meals belong in the category of Travel expenses on line 9200. The link is for T2125 and this scenario is for an incorporated business but the GIFI code is 9200 as well on the T2.

  19. How to claim meal and entertainment expenses when it falls ...

    So you enter $100 as M&E and the software reduces it to $50 for either of corporate or personal tax purposes. The problem for me is how to keep the QB sales tax filing in sync with the CRA sales tax filing. I think the best way is to set up a sales tax code of 6.5% and apply it only to the Meals & Entertainment account in the chart of accounts.

  20. Your 2023 Tax Guide To Entertainment And Meal Deductions

    The meals and entertainment tax deductions have been a valuable way for many small-business owners to reduce their tax liabilities each year. Sadly, the value of the meal deduction will be cut in ...

  21. The annual calendar of major events in Moscow Russia 2024

    Museum Night is an annual project that will take place in Moscow 15 times. Most of the city's cultural institutions traditionally take part in it. Most of the city's museums and exhibitions are free to visit. In parks, country estates, thematic performances and entertainment cultural events are held.

  22. Business expenses

    The CRA may also ask for dispatch slips or other documents to support the days worked during the tax year. ... The 50% limit also applies to the cost of food and beverages served and entertainment enjoyed when you travel on an airplane, train or bus, when the ticket price does not include such amounts. Forms and publications.

  23. Live Music in Moscow, ID

    This historic building located in downtown Moscow, offers high quality entertainment including live theatre, films, concerts, lectures and other performing arts. Join the Kenworthy for everyone's favorite summer tradition! The Saturday Market Cartoons are every Saturday, June through September from 9AM to noon.