TAX QUESTIONS? YOU ASK LAH!
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Q: I’m using a subcontractor to perform a service for my business. Under the subcontractor’s agreement, I am contractually required to reimburse his meal expenses incurred while working on my clients' projects, hence the subcontractor will bill me for these expenses. Are they tax deductible?
A: Yes. As you are contractually obliged to bear the subcontractor’s meal expenses, the reimbursement is generally regarded as part of the subcontractor’s service fees. Therefore, it is 100% tax deductible, provided the subcontractor’s service is wholly and exclusively acquired in the production of your business income.
Wishing you plentiful tax savings!
Zen Chow
YYC Tax Guru
