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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
March 15, 2000
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter of January 20, 2000, in response to my previous correspondence of February 2, 1999, in which you express concern about the calculation of the taxable benefit you received for the personal use of an older company-owned vehicle. As you may be aware, on November 1, 1999, Revenue Canada became the Canada Customs and Revenue Agency (CCRA).
You have asked to be permitted to base the standby charge on the depreciated value of the vehicle owned by your registered company. The "reasonable standby charge" that you have referred to is defined in the Income Tax Act and is not subject to variation by the CCRA. The provisions of the Act must be applied in a fair and consistent manner to all taxpayers.
I am advised that Finance officials have informed you that the Department of Finance is currently examining the issue of older vehicles, as part of a review of the automobile benefit calculation. In the interim, I understand that in situations similar to yours, many practitioners recommend avoiding any benefit by having the employee purchase the vehicle and the employer compensate them for the business use of the vehicle. You may want to discuss this possibility with your tax advisor.
I trust that you will find my comments helpful.
Yours truly,
Bill McCloskey
Assistant Commissioner
Policy and Legislation Branch
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