Principal Issues: [TaxInterpretations translation] For employees of transport companies and certain other employees, there is a simplified method for calculating deductible meal expenses. Does a self-employed person who works on the road have a similar mechanism if that person meets conditions similar to those in paragraph 8(1)(g) of the Act?
Position: No.
Reasons: Section 9 of the Act applies to a self-employed person to compute business income. The simplified method described in paragraph 12 of Information Circular 73-21R7, Away-from-home Expenses, applies only to certain employees and not to self-employed workers.
October 1st, 2002
LAVAL TAX SERVICES OFFICE Headquarters
Martine Filiatrault, CA
Tél. : (613) 957-8953
Attention: Ms. Chantal Tourigny
2002-015488Interpretation request
Meals for self-employed workers
This is further to your request of July 29, 2002 for our opinion on the above subject.
Question
You wish to know whether a self-employed person who works on the road can use the simplified method to calculate meal expenses if the person meets conditions similar to those set out in paragraph 8(1)(g) of the Income Tax Act (the "Act").
Our Opinion
Paragraph 8(1)(g) of the Act allows employees of freight and/or passenger transportation companies to deduct certain meal and lodging expenses, subject to the conditions set out therein. Those employees must normally provide supporting documentation for all expenses for which they claim a deduction under paragraph 8(1)(g). However, the Canada Customs and Revenue Agency allows those employees, as well as certain other employees, to use a simplified method that allows them to use a flat rate per meal and thus avoid the requirement to submit supporting documentation. Information Circular 73-21R7 provides more details on the conditions to be met in order to use the simplified method.
However, no similar position exists in the case of a self-employed person who works on the road. Self-employed workers must therefore take into account meal expenses actually incurred in computing their business income, in accordance with section 9. They must also keep the supporting documents needed to substantiate the deduction of those business expenses.
If you would like additional information on this subject, please do not hesitate to contact us.
Best regards,
Ghislaine Landry, CGA
Manager
Individuals, Business
and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate
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