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.
Principal Issues: What constitutes personal use of an employer-provided motor vehicle by construction site foremen? Mainly where the motor vehicle is used to travel between a foreman's home and a construction site or an employer's premises and the foreman is required to take the motor vehicle home, either because the construction site is not secure, the motor vehicle is equipped with special tools, material or equipment, or the foreman is on call for emergencies or must pick up tools, equipment, fuel or other employees while on route to the construction site or the employer's premises.
Position: Generally, travel between an employee's home and regular place of employment is considered personal, unless the exception paragraph 5 of IT-63R5 is met.
Reasons: Longstanding position supported by jurisprudence.
Randy Hewlett, B.Comm.
XXXXXXXXXX 613-957-8973
2004-009655
January 7, 2005
Dear XXXXXXXXXX:
Re: Personal Use Of An Employer-Provided Motor Vehicle
We are writing in response to your letter of September 20, 2004, regarding the calculation of taxable benefits under the Income Tax Act in respect of the personal use of an employer-provided motor vehicle by construction site foremen.
In your letter, you asked numerous questions on what constitutes personal use of an employer-provided motor vehicle by construction site foremen in a variety of situations. We understand that your main concerns relate to the use of a motor vehicle to travel between a foreman's home and a construction site or an employer's premises. The foreman is generally required to take the motor vehicle home at night either because the construction site is not secure, the motor vehicle is equipped with special tools, material or equipment, or the foreman is on call for emergencies or must pick up tools, equipment, fuel or other employees while on route to the construction site or the employer's premises. In your view, use of the motor vehicle to travel between the foreman's home and the construction site or the employer's premises should not be considered personal under these circumstances.
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 income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to offer the following comments.
The determination of whether or not a motor vehicle is used for personal purposes can only be made after considering all of the facts. The general position of the Canada Revenue Agency on what constitutes personal use of an employer-provided motor vehicle is discussed in Interpretation Bulletin IT-63R5, Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer - after 1992. In general terms, travel between an employee's home and regular place of employment is considered personal. It will always be a question fact whether a particular work location is considered a regular place of employment. However, any location at or from which the employee regularly reports for work or performs the duties of employment is generally considered a regular place of employment. In this regard, it should also be noted that an employee could have more than one regular place of employment, which can change from time to time because of the nature of the employment situation.
There is an exception to this general rule discussed in paragraph 5 of IT-63R5, where an employee (as required by the employer or with the employer's concurrence) proceeds directly from home to a point of call other than the employer's place of business to which he or she regularly reports, or returns home from such a point. These particular trips are generally not considered personal when the primary purpose of the trip is for bona fide employment-related reasons. In terms of your main concerns outlined above, we are of the view that the use of the motor vehicle to travel between a foreman's home and regular place of employment (whether it is the construction site or the employer's premises) is personal unless the trip falls within this exception. For additional comments you may also find it helpful to refer to a recently published technical interpretation concerning this subject, our document number 2004-0081891E5.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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