CRA states that the value of a free automobile to be included in s. 9 income should reflect what the recipient would normally charge for its services
CRA indicated that where a personal service business corporation (“PSB”) provides its services to a client and, as a result, receives “free” use of an automobile, the value of the services provided by the PSB (to be measured by “the price which the PSB would normally have charged a stranger for its services”) should be brought into its income. The posited facts were that, in fact, it was a corporation related to the client who provided the automobile, but this did not make a difference to CRA’s answer.
If the automobile was for the personal use of the PSB shareholder, there would be a resulting taxable benefit to the shareholder.
Neal Armstrong. Summary of 9 May 2016 Internal T.I. 2016-0638461I7 under s. 9 – computation of profit.