29 January 2001 External T.I. 2000-0049425 - TAXABLE BENEFIT-MILEAGE ALLOWANCE

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.

Principal Issues: Whether a mileage allowance or a taxi expense paid by an employer to an employee would be considered a taxable benefit when the employee is called-back for emergency cases after normal business hours?

Position: Yes

Reasons: Travel between home and the work place is personal in nature. This is the case for regularly scheduled trips or an unexpected trip after normal business hours, except where the employee is obliged to proceed directly from home to a point of call other than the employer's place of business to which the employee reports regularly or returns home from such a point.

XXXXXXXXXX 	Frank Gillman, LL.L., C.A.
		2000-004942
January 29, 2001

Dear XXXXXXXXXX,

Re: Taxable Benefit - Mileage Allowance

This is in reply to your letter of September 27, 2000, wherein you requested whether a mileage allowance would be considered a taxable benefit by the Canada Customs and Revenue Agency (CCRA) when paid by the University to an employee who is called-back for emergency cases after normal business hours. The mileage allowance paid to the employee in such a scenario would be based on the number of kilometers between the individual's home and the University site, i.e. the normal work location.

Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request. The procedures for requesting an advance income tax ruling are outlined in Information Circular 70-6R3 dated December 30, 1996. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following comments which are of a general nature and are not binding on CCRA.

Our general view is that travel between home and the work place is personal in nature. The rationale which holds that such travel is personal applies equally to the regularly scheduled trips between work and home and to the unexpected trip arising as a result of a call to return to work after the regular hours of employment. In our view, an employee's requirement to be on call and be paid a mileage allowance when called back for emergency cases does not diminish the benefit received by the employee and as such is viewed as a taxable amount when received. The fact that the employee remains on call does not change the nature of the trip. Likewise, while we agree that the reimbursement of an expense incurred in the performance of one's duties of employment is not a benefit to the employee, it is our view that the reimbursement of a personal expense of an employee, such as a taxis expense to go between home and work, is a taxable benefit.

Should you have any other specific concerns please contact the Trust Accounts Division of the XXXXXXXXXX Tax Services Office.

We trust that our comments will be of assistance.

Yours truly,

John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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