Canadian Income Tax - PPC Traffic Expenses?
 

Looking at the income tax guide about "advertising", which is what PPC traffic seems to be classified under, I read that you CANNOT deduct expenses:

"for advertising directed mainly to a Canadian market when you advertise with a foreign broadcaster; or in an issue of a non-Canadian newspaper or periodical."

So essentially, unless your PPC is going to canadians from a canadian website, you can't claim it as a justifiable expense? That is SICK.

This is scary. I spoke to my accountant about it but he is not internet-savvy. Any Canadians here deal with this?

Do you classify the PPC as not advertising, but as non-tangible deliverables or as a contractual service?

hmm, ill let me accountant do what he does
i would figure it is a ad expense..

But advertising in non-Canadian sources and not delivered to Canadians cannot be claimed, from what I read in the guide, and how my accountant interprets it.

I think one key phrase is; "directed mainly to a Canadian market". If you're buying global or mainly US traffic traffic you're ok. The only way you would not be able to deduct is if you were buying Canadian traffic from a non-Canadian (eg. Google) source.

And "issue of a non-Canadian newspaper or periodical". I don't think anyone can make the arguement that a search engibe is a "newspaper" or "periodical".

I think that section of the tax act was meant to protect against "split-run" US magazines, that were quite popular with US publishers a number of years ago.

hmmmm.... this is interesting. Just claim it as an expense and play stupid.

I'm not an accountant, but what that means to me is if you are buying traffic that you intend to gear towards mostly a Canadian audience, from a non-Canadian source, then you can't claim it.

So unless you are targetting your traffic towards Canadians specifically, I doubt it matters.

I think you guys have hit the nail on the head. Even though I DO get canadian traffic through google, I target US/world as well with the same campaigns so it does not fall under that restriction.

Panic averted.

Maybe you shouldn't have to claim the money made neither if your sales came from American buyers via an American ad source. :Graucho

You should be fine, the clause says specifically "for advertising directed mainly to a Canadian market when you advertise with a foreign broadcaster"

I don't know of any PPC search engine which is directed mainly towards Canadian markets unless you specifically pick Geotargetting to Canada. Since this is not really the case for most people, then you should not worry.

This clause seems silly if you ask me anyways, by using foriegn markets to bring in new business to Canada should be allowed.

WG

btw, can you post the entire section of that clause you got it from, I would like to read more into it.

WG