Line 8523 - Meals and entertainment (allowable part only)

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.

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 and Convention expenses.

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 is not paid or payable in respect of a conference, convention, seminar, or similar event.
  The special work location must be at least 30 kilometers from the closest urban centre that has a population of 40,000 or more people. For more information about urban centres, see Statistics Canada data on Population and dwelling counts, for urban areas.
• You incur meal and entertainment expenses to provide a Christmas party or similar event, and you invite all your employees from a particular location. However, you are limited to six of these events each 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 for the purpose of providing meals and accommodation to employees working at a construction site. In addition, 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 for hospitality suites. For more information, see Interpretation Bulletin IT-518R, Food, Beverages, and Entertainment Expenses.

Long-haul truck drivers

For 2011, 80% of expenses for food and beverages consumed by a long-haul truck driver during an eligible travel period are deductible.

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 in which the driver resides (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 kilometers from the residential location.

Extra food and beverages consumed by self-employed foot and bicycle couriers and rickshaw drivers

Self-employed foot and bicycle couriers and rickshaw drivers can deduct the cost of the extra food and beverages they must consume in a normal working day (8 hours) because of the nature of their work.

For 2006 and subsequent taxation years, you may claim a flat rate of $17.50.

If you are claiming this deduction you should be prepared to provide log books showing the days worked and the hours worked on each of these days during the taxation year. The CRA may also request dispatch slips or other documents in support of the days worked during the taxation 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 beverage claimed; and
• a clear demonstration of the extra amount of food and beverage requested because of the nature of your work, and how this amount exceeds what the average person would consume both in terms of cost and quantity.

Forms and publications

• Guide T4002, Business and Professional Income
• Form T2125, Statement of Business or Professional Activities
• Interpretation Bulletin IT-518R, Food, Beverages, and Entertainment Expenses

Related topics

• Convention expenses
• Travel

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