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Under the current Income Tax Act, Canadian businesses can claim a 50% deduction for eligible business entertainment expenses for a wide range of activities used to build client relationships and conduct business; from restaurant meals, sporting events, and concerts to other recreational activities such as skiing, tennis and pickleball.
Golf, however, is specifically excluded.
Paragraph 18(1)(l)(i) of the Income Tax Act prevents businesses from claiming the deduction when legitimate business entertainment involves a round of golf with clients, however, they can claim the deduction when entertaining clients at a hockey game, a concert, skiing and pretty much any other activity other than golf.
This provision dates back more than 50 years and must be changed so that golf is treated like all other client entertainment activities. There is arguably more business development that can happen on a golf course than most other comparable activities.
NGCOA Canada is calling on the Government of Canada to modernize this provision so that legitimate golf-related business entertainment expenses - specifically green fees and power cart fees - can qualify for the same 50% deduction available to other eligible forms of business entertainment.
This would not create a new tax benefit or provide preferential treatment for golf. It would remove the current exclusion and provide golf-related business entertainment with tax treatment consistent with other eligible activities.
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