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.
DM'S OFFICE (3)
ADM'S OFFICE (3)
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SUBJECT OR CORPORATE FILE
January 2, 1994
XXXXXXXXXX
Dear XXXXXXXXXX:
I am writing further to
XXXXXXXXXX
in our view, the gift certificates constitute food expenses, the deductibility of which is governed by subsection 67.1(1) of the Income Tax Act (the "Act"). Subsection 67.1(1) of the Act limits the amount that may be deducted "in respect of the human consumption of food or beverages". As was stated by the Supreme Court of Canada in the Nowegijick v. The Queen et al., 83 D.T.C. 5041 case, the words "in respect of" are "words of the widest possible scope". Accordingly the wording of subsection 67.1(1), and more particularly the expression "in respect of", is of such wide import that it encompasses any cost in respect of the consumption of food or beverages.
The limitation on amounts expended in respect of food, beverages and entertainment applies equally whether the amounts are otherwise deductible as expenses. Therefore, although the expense incurred towards the purchase of these gift certificates may be otherwise deductible, the limitation of subsection 67.1(1) of the Act will nevertheless apply to the gift certificates to reduce the amount that may be claimed for tax purposes.
Should you have any questions regarding this matter, please do not hesitate to contact Mr. Denis Lefebvre, the Assistant Deputy Minister of the Legislative and Intergovernmental Affairs Branch at (613) 957-2041.
Yours sincerely,
Pierre Gravelle, Q.C.
C. Chouinard
957-2098
March 2, 1994