(1) Input tax, incurred by a registered tax payer on inputs for an employee of that tax payer, is not deductible, unless it is proven to the satisfaction of the Commissioner-General that the input was sold to the employee or rendered to the employee as a service, and the sale or the service is included in the periodic return of the dealer as a taxable transaction, the price of which was set in accordance with the provisions of subsection (8) of section 48 of the Act.

(2) For the purposes of subregulation (1)

“employee” includes a person who shares in the ownership of the business or is one of the directors of the business; and

“input”, in respect of an employee means an asset or a service, in the nature of a meal, housing, gifts or entertainment or any other similar asset intended for the enjoyment, profit, welfare or benefit of an employee or of members of the family of the employee.