In a January 23, 2023 French Court of Quebec case, a commissioned salesperson deducted nearly $600,000 over 2015 and 2016, in sponsorship expenses of a professional cycling team in Canada. The individual was an investment advisor and reported commission income of $1,493,910 and $1,263,360 and taxable capital gains of $2,276,374 and $99,767 in the respective years.
The taxpayer argued that the sponsorship promoted his services as an investment advisor. As the main sponsor of the cycling team, the taxpayer explained that he benefited from enhanced visibility, as follows:
- the taxpayer’s name was in large letters on the front of the cyclists’ jerseys, on both sides of the cyclists’ shorts and on the team’s cycling shoes;
- the investment institution’s name and logo were on both the front and back of the cyclists’ jerseys; and
- the team’s website (www.silberprocycling.com) incorporated the taxpayer’s name (Silber) into the website domain.
The Court noted that neither the taxpayer nor any of his family members benefited from the cycling team’s equipment, advice or products.
The Minister argued that the sponsorship expenses were unrelated to the taxpayer’s employment as a commissioned salesperson and that the expenses were unreasonable.
Please see the second part of the article about how the taxpayer wins in our next article.
*The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this text accepts any contractual, tortious, or any other form of liability for its contents.
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