24(1)
5-902878
W.P. Guglich
(613) 957-2102
19(1)November 26, 1990
Dear Sirs:
Re: Food, Beverage and Entertainment Expenses
This is in reply to your letter of October 11, 1990, concerning the amount deductible, pursuant to subsection 67.1(1) of the Income Tax Act (the Act), where an employer reimburses his employees for 80% of their actual promotion expenses.
Subsection 67.1(1) of the Act provides that the amount paid or payable in respect of expenses described therein is deemed to be 80% of the lesser of: (a) the amount actually paid or payable in respect thereof, and (b) an amount in respect thereof that would be reasonable in the circumstances. Therefore in our view if the employer reimburses his employees for 80% of their actual promotion expenses the amount deductible pursuant to subsection 67.1(1) of the Act can not exceed 80% of the amount actually paid by the employer (i.e., 80% of 80%).
The Department's position with respect to the application of subsection 67.1(1) of the Act is outlined in Interpretation Bulletin IT-518 .
We trust this will be of assistance to you.
Yours truly,
for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch