24 July 1990 Income Tax Severed Letter ACC9404 - Deductibility of Convention Expenses

24(1)                       900982
                                    W.P. Guglich
                                    (613) 957-2102

Attention:          19(1)

JUL 24 1990

Dear Sirs:

This is in reply to your letter of May 23, 1990, concerning the deductibility of expenses relating to a convention to be held aboard a cruise ship.

The Department's position as set out in paragraph 2 of Interpretation Bulletin IT-131R2 is that a convention held during an ocean cruise is considered as being held outside the territorial scope of the organization. Since subsection 20(10) of the Income Tax Act requires the convention to be held at a location that can reasonably be regarded as consistent with the territorial scope of the organization it is our view that the expenses relating to a convention that your clients propose to hold during an ocean cruise (a cruise to Alaska is considered an ocean cruise) would not be deductible by the members.

We trust our comments will be of assistance.

Yours truly

for Director Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch