CRA is inclined to base the s. 6(2) standby charge on the leasing cost to the employer rather than the automobile’s cost to an affiliated purchaser

In the situation where Holdco acquires an automobile and leases it to a related corporation (Opco) at a fair market value rent, with Opco making the automobile available to one of its employees, a literal reading the standby charge formula would indicate that the standby charge is based on both the cost of the automobile to Holdco and the leasing cost to Opco, so that effectively there is double taxation. Finance has been notified about this.

Depending on all the facts of the situation, CRA generally would be inclined to base the standby charge only on the leasing cost to Opco.

Neal Armstrong. Summary of 6 October 2017 APFF Roundtable, Q.13 under s. 6(2).