Bill C-324

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First Reading

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	2nd Session, 35th Parliament, 45 Elizabeth II, 1996
	The House of Commons of Canada
	BILL C-324
	An Act to amend the Income Tax Act (entertainment expenses)
R.S., c. 1 (5th Supp.); 1994, cc. 7, 8, 13, 21, 29, 38, 41; 1995, cc. 1, 3, 11, 18, 21, 38, 46	Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
	*1. Section 67.1 of the Income Tax Act* is replaced by the following:**
Expenses for food, etc.	67.1 (1) For the purposes of this Act, other than sections 62, 63 and 118.2, an amount paid or payable in respect of the human consumption of food or beverages shall be deemed to be 50% 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.
Exceptions	(2) Subsection (1) does not apply to an amount paid or payable by a person in respect of the consumption of food or beverages where the amount
	(a) is paid or payable for food or beverages provided for, or in expectation of, compensation in the ordinary course of a business carried on by that person of providing the food or beverages for compensation;
	(b) relates to a fund-raising event the primary purpose of which is to benefit a registered charity;
	(c) is an amount for which the person is compensated and the amount of the compensation is reasonable and specifically identified in writing to the person paying the compensation;
	(d) is required to be included in computing the income of an employee of the person or would be so required but for subparagraph 6(6)(a)(ii); or
	(e) is incurred by the person for food or beverages generally available to all individuals employed by the person at a particular place of business of the person and consumed or enjoyed by such individuals.
Fees for convention, etc.	(3) For the purposes of this section, where a fee paid or payable for a conference, convention, seminar or similar event entitles the participant to food or beverages (other than incidental beverages and refreshments made available during the course of meetings or receptions at the event) and a reasonable part of the fee, determined on the basis of the cost of providing the food and beverages, is not identified in the account for the fee as compensation for the food and beverages, $50 or such other amount as may be prescribed shall be deemed to be the actual amount paid or payable in respect of food and beverages for each day of the event on which food or beverages is provided and, for the purposes of this Act, the fee for the event shall be deemed to be the actual amount of the fee minus the amount deemed by this subsection to be the actual amount paid or payable for the food and beverages.
Interpreta- tion	(4) For the purposes of this section, no amount paid or payable for travel on an airplane, train or bus shall be considered to be in respect of food or beverages consumed or enjoyed while travelling thereon.