So you want to claim a meal or entertainment expense that was incurred for the purpose of earning income, there are some rules you need to follow in order to keep the tax man happy when he drops by to audit your business expenses, here are some general rules:
- Be sure to keep both the detailed receipt issued by the restaurant or establishment showing the details of the expense, along with the credit card slip (if that is your form of payment) showing the total paid including a reasonable tip.
- Note on the back of the receipt, the names and business addresses of the customers, or persons being entertained, including the relationship and reason for the claim (eg. Joe Smith, 123 Any Street – ABC Corporation – Potential New Client).
It should be noted that there are special rules under certain circumstances, for example while attending a conference, convention or seminar and when the cost of a meal is included in a transportation fee. It is best to review the Canada Revenue Agency’s IT-518R for specifics on unusual circumstances.