Management fees are paid to the managers of a business for management services performed. Only reasonable management fees paid can be deducted as an expense. However, the Canada Revenue Agency has not explicitly stated what a reasonable amount is to charge for a management fee. Generally speaking, a reasonable management fee should be equal to the amount that a third party would charge for the same service. Additionally, if the management fee is based on hours of work performed, a detailed time log should be kept.
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