Usually deduction of meals and beverages cost is limited to 50%. This general rules also applies to the cost of meals and entertainment for employees. However there are few exceptions to this general rule as follows:
Employment at Remote Work Sites
The 50% limitation does not apply if paid for food or beverages for employees at a location where, due to its remoteness from any established community, the employee could not reasonably be expected to establish and maintain a self-contained domestic establishment.
Criteria
– A remote work location is a location at least 30Kms from any urban area
– Has population of at least 40,000 people
– Employee must be away from the employee’s principal place of residence
Employer-Sponsored Events
Special events such as Christmas or similar event to which all employees at a particular place of business have access, expenses incurred for meals and entertainment are fully deductible to employer.
