18 July 2000 External T.I. 2000-0019395 - CLAIM FOR MEAL EXPENSES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

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.

Principal Issues: Whether employees of XXXXXXXXXX working on runs which do not leave the municipality or metropolitan area for more than fours hours should be allowed a deduction for meal expenses under paragraph 8(1)(g) of the Act.

Position: No.

Reasons: The CCRA will administratively allow meal deductions after four hours away from the municipality, this position will not be extended to include situations which do not meet the four hour requirement.

XXXXXXXXXX 	2000-001939
		Karen Power, CA
Attention: XXXXXXXXXX 

July 18, 2000

Dear Sir/Madam:

Re: Claims for Meal Expenses by XXXXXXXXXX Employees

We are writing in reply to your letter of March 30, 2000 in which you requested that XXXXXXXXXX employees working on all runs be allowed to claim meal expenses pursuant to paragraph 8(1)(g) of the Income Tax Act (the "Act").

Our Comments:

Under paragraph 8(1)(g) of the Act, an employee who works for an employer whose principal business is the transportation of passengers, goods, or both, may be entitled to a deduction for meals and lodging. Individuals must satisfy the following conditions to be able to claim meals and lodging expenses. They must travel away from the municipality and its metropolitan area, if there is one, and while away, they must make disbursements for meals and lodging. If they do not meet one of these two conditions, they are not entitled to deduct meals and lodging expenses, regardless of the method of calculation they choose.

The courts have looked at this deduction a number of times. An excerpt from Derrien v. M.N.R (80 DTC 1951) M. J. Bonner, a member of the Board provides us with the context of paragraph 8(1)(g) of the Act. Mr. Bonner's words are reiterated in i, 86 DTC 1210 (T.C.C.) and in MacDonald v. The Queen, [1995] T.C.J. No. 1084 (T.C.C.).

"In my view the solution becomes apparent when paragraph 8(1)(g) is read as a whole within its statutory context. The approach of the Income Tax Act to deductions from salary or wages in the process of computing income from office or employment is generally restrictive. In this regard, reference should be made to subsection 8(2) of the Act. The exceptions in subsection 8(1) are not to be regarded as having been inserted capriciously. The exception made for transport employees by paragraph 8(1)(g) recognizes that the nature of the work often involves substantial trips away from the area where such employees live and report for work. Such trips impose a burden of expense for meals and lodging not borne by the ordinary worker who can sleep and eat, at least most of the time, at home. The 'while so away' qualification and the use of the word 'and' in the phrase 'disbursements for meals and lodging' tend to support this conclusion. The cost to the ordinary worker of food and shelter is a personal expense. The cost to a transport worker of meals and lodging necessitated by travel in the course of his duties is much more directly related to the income earning process.

When paragraph 8(1)(g) is read as a whole within its context it will be seen that some of the dictionary definitions of 'travel', such as 'to go from one place to another', are inappropriate. When paragraph 8(1)(g) refers to travelling away from a municipality and its metropolitan area it contemplates journeys of such substantial distance and duration as to require disbursements for both meals and lodging. It does not encompass all cases in which a taxpayer goes from a place inside the metropolitan area to a place just outside it. (emphasis supplied)

In this case the Appellant's claim was limited to disbursements for meals alone. It is unnecessary to decide whether the Appellant's trips took him beyond the boundary of the metropolitan area in which Sea Island is located. The trips could not be said to involve travel away from that metropolitan area within the meaning of paragraph 8(1)(g). The appeal is therefore dismissed."

Although the courts have indicated that paragraph 8(1)(g) contemplates journeys of substantive duration, the CCRA has allowed the deduction of meal expenses incurred after every four hours from the employee's check-out time to a maximum of three meals a day. The check-out time is normally considered to be the time the employee leaves the last stop within the municipality or the metropolitan area.

In your situation, CCRA officials have determined that some runs do not leave the municipality for over four hours at a time. Given the Courts views expressed above we believe the CCRA's current position for meals expenses is a liberal interpretation of paragraph 8(1)(g) of the Act.

We trust our comments will be of assistance to you.

Yours Truly,

John Oulton
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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