Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
July 30, 1998
XXXXXXXXXX
Dear Colleague;
Thank you for your letter of April 20, 1998, on behalf of XXXXXXXXXX, concerning tax policies relating to the deductibility of entertainment expenses at golf clubs. Representations were also made on XXXXXXXXXX behalf by his Member of Parliament, XXXXXXXXXX. I responded to XXXXXXXXXX recently about this issue.
I am pleased to inform you that the Department now considers that the restriction in paragraph 18(1)(l) of the Income Tax Act, on deducting entertainment expenses at golf clubs, applies only to the recreational amenities provided by a golf club. Accordingly, this will not include the dining room, banquet halls, conference room, beverage room or lounges of a golf club. Thus, 50 per cent of the cost of meals and beverages at a golf club will be allowed as a deduction if incurred in the course of conducting business. As a result, the tax treatment of meals and beverages at a golf club will parallel that of meals and beverages consumed at a restaurant. In administering this new position, the Department will require that meal and beverage expenses incurred at a golf club be clearly itemized.
I trust that this information will clarify the Department’s position on this matter.
Yours sincerely,
Herb Dhaliwal, P.C., M.P.
C. Tremblay
957-2139
June 4, 1998
981136