Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Whether a specific location is a special work site or remote work location.
Position TAKEN:
May be either. General information provided.
Reasons:
Question of fact.
XXXXXXXXXX 2002-013766
T. Young, CA
July 12, 2002
Dear XXXXXXXXXX:
Re: Special Work Sites and Remote Work Locations
We are writing in response to your letter dated April 25, 2002, wherein you requested written confirmation that your work site qualifies as a special work site or a remote work location. In your letter, you provided the following facts:
1. You work at a plant located XXXXXXXXXX.
2. You are serviced and brought to work by aircraft.
3. You stay at the camp where you are provided lodging.
4. You sleep with a plant alarm in your rooms, as you are on call 24-hours per day.
5. You stay at the work location for XXXXXXXXXX weeks at a time.
6. There is no way to get to the work location except by a XXXXXXXXXX road, which is active about XXXXXXXXXX months of the year. The driving distance to a major centre is XXXXXXXXXX kilometres.
7. Each of you maintains a dwelling as your residence at another location.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. However, we are prepared to provide the following comments, which may be of assistance to you.
As stated in paragraph 1 of IT-91R4, Employment at Special Work Sites or Remote Work Locations, which you referred to in your letter, generally, an allowance paid to an employee and the value of employer-provided board and lodging or transportation to and from the job are included in the employee's income under the rules in subsection 6(1) of the Income Tax Act (the "Act"). These rules also apply to amounts paid to reimburse outlays by an employee for meals, lodging, transportation or other items, which are personal or living expenses. However, by virtue of subsection 6(6) of the Act, an exception to these rules is provided in limited circumstances for special work sites or remote work locations.
Since you have read the interpretation bulletin, we will not repeat the specific requirements to qualify as a special work site or a remote work location. However, whether a specific location is a special work site or a remote work location is a question of fact and depends on the specific circumstances relating to the location and to the specific employee involved. For example, if an employee maintains at another location a self-contained domestic establishment as the employee's principal place of residence, the employee could receive an allowance for or the value of employer-provided board and lodging at a special worksite on a tax-free basis. In order to do so, the duties must be of a temporary nature (see paragraphs 5 and 6 of the interpretation bulletin). Alternatively, an employee may qualify under subsection 6(6), if the work site qualifies as a remote work location even if the duties are not of a temporary nature (see paragraphs 14 to 17 of the interpretation bulletin).
In our opinion, the situation you described may qualify as either a special work site or a remote work location depending on whether the duties were of a temporary nature.
From your letter, your specific concern appears to be what amounts can be received or enjoyed tax-free because of subsection 6(6) of the Act. If subsection 6(6) applies to a specific situation, either the value of board, lodging and travel provided by the employer, or an allowance in respect of board, lodging and travel, would be received tax-free. In your situation, it appears that your employer provided you with board, lodging and travel, the value of which is normally a taxable benefit to the employee. However, if subsection 6(6) applies, the value of these benefits can be received tax-free.
We trust our comments will be of assistance to you. If you have any further questions or if you need information on your own particular situation, please contact the Client Services Division of the XXXXXXXXXX Tax Services Office.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
c.c. Assistant Director, Client Services Division, XXXXXXXXXX TSO
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