Can I Claim Meals and Entertainment as a Business Expense in Canada?
50% deductible for meals and entertainment incurred for business purposes. Receipts and business purpose must be documented. Exceptions allow 100% deduction for certain employee events (up to 6 per year), meals at remote work sites with shift restrictions, and meals included in a conference fee.
What Canada Revenue Agency (CRA) says
Section 67.1 of the Income Tax Act limits the deduction for meals and entertainment to 50% of the amount paid. The expense must be for the purpose of earning business income, not lavish or extravagant, and the business purpose must be documented. CRA Interpretation Bulletin IT-518R provides guidance on the exceptions.
When you can claim
- 50%: meals with clients, customers, or prospects for business purposes
- 50%: meals while travelling for business away from the business's regular location
- 100%: employer-provided meals for employees at a remote work location under shift restrictions
- 100%: staff party or event (up to 6 events per year, open to all employees)
- 100%: meals included in a conference fee (not itemised separately)
When you cannot claim
- Personal meals and entertainment with no business purpose
- Meals that are lavish or extravagant relative to the circumstances
- Entertainment at golf clubs or sporting events where no business is conducted
- Meals at restaurants primarily for personal enjoyment even if discussed for business
Good to know
Pro tip: Write the business purpose, names of attendees, and business relationship on the back of every receipt at the time of the meal. CRA requires this documentation, and reconstructing it months later is difficult. Use accounting software to photograph receipts immediately.
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