CCRA raises per diem diet to $45 a day
OTTAWA, (Oct. 24, 2003) — The Canadian Minister of National Revenue Elinor Caplan has announced that Canada Customs and Revenue Agency has increased the allowable flat rate truck drivers can deduct for meal expenses from $33 a day to $45.
Starting this 2003 tax year, transport employees — and owner-operators who incorporate naming themselves as an employee — will be allowed to use the rate of $15 per meal (up from $11) up to a maximum of $45 a day when claiming meal deductions of 50 per cent on their tax return. As well, truckers travelling and incurring meal expenses in the United States may now use the rate of US$15 per meal up to a maximum of US$45 per day, converted to Canadian dollars. The Income Tax act permits employees to deduct 50 per cent of either the flat rate or actual costs, which can be claimed with meal receipts. Employees can only claim meal expenses if they are not reimbursed for any part of the amounts deducted.
“It’s a victory for hundreds of thousands of hard working truck drivers,” said David Bradley, CEO of the Canadian Trucking Alliance, which has been pushing CCRA to make the change to the receipt-free limit. However, Bradley is concerned that still only 50 percent of meal costs can be deducted in Canada, whereas in the U.S. the original level of 80 per cent is being phased in.
Some drivers have been battling CCRA over the meal tax deduction rate for years. The issue heated up after Today’s Trucking’s sister publication highwaySTAR broke the story of Don Wilkinson in 2001. Wilkinson is a Manitoba truck driver who challenged the amount the CCRA allowed transport workers to deduct for meals using CCRA’s “simplified” calculation method, which required drivers to keep a travel record but not receipts for each meal. He took the CCRA to court, arguing the $33 a day the government allowed wasn’t reasonable for his profession. A judge agreed, granting Wilkinson’s claim of $40 per day minus 50 per cent.
The judge’s decision didn’t establish exactly what is “reasonable” for truck drivers to claim under the simplified method. It only stated that, in Wilkinson’s case, $33 a day was insufficient and the $40 Wilkinson suggested was more appropriate.
After the story broke, dozens of truck drivers repeated the same challenge. However, because the case wasn’t precedent setting, drivers were welcomed to make a similar argument, but had to present each case individually before the court.
Chris Bennett of TFS Group, a Waterloo, Ont.-based firm that specializes in accounting for small trucking companies and owner-operators, believes the change was simply a bone thrown to drivers to keep mounting challenges at bay, adding there are still many problems — especially the 50 per cent deductible limit — that need fixing.
“It’s a finger in the dike, when the hole’s as big as your hand,” Bennett, who has challenged the government on behalf drivers on the meal tax issue for years, told Today’s Trucking. “It doesn’t really change much. Forty-five (a day) doesn’t even come close to approaching, for example, what government employees get as federal civil servants. So it’s nice, thank you very much. But it’s too little too late. The 50 per cent thing is still a joke.”
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