16 January 2001 External T.I. 2000-0057695 - PERSONAL USE OF AUTOMOBILE

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 travel from home to office is personal where employee has to travel out of office during the day, or stops at a point of call, while going to or from work.

Position: Travelling to or from regular workplace is personal notwithstanding that employee must use car during workday.

Reasons: Consistent with earlier opinions

XXXXXXXXXX 	2000-005769
		Wayne Antle, CGA
January 16, 2001

Dear XXXXXXXXXX:

Re: Personal Use of Automobile

This is in response to your letter dated November 9, 2000 in which you ask us to consider whether travel between an employee's home and office would be considered business-related where the employee was required to travel out of the office during the day, or had to travel to a point of call before proceeding to the office at the beginning of the day.

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. 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.

The determination of whether or not an automobile is used for employment-related purposes can only be made after considering all of the facts. The general position of the Canada Customs and Revenue Agency (the "CCRA") on the benefits that must be attributed to employees who are provided with automobiles by their employers is set out in IT-63R5. As noted in this bulletin, the CCRA's long-standing position is that travel between an employee's regular place of employment and home is considered to be personal. However, there is an exception in paragraph 5 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 considered to be employment-related. In this regard, you have asked us to consider the following round trips as being within this exception:

1) An employee travels to the office at the beginning of the day, travels out of the office during the day, and returns home from the office at the end of the day.

2) An employee travels to a point of call before proceeding to the office at the beginning of the day, and returns home from the office at the end of the day.

Scenario 1

With respect to the first round trip scenario outlined above, where an employee is required to travel out of the office during the day to perform his or her duties of employment, these trips would be considered business-related. However, it is our view that travel between an employee's home and the employer's regular work location, at the beginning and end of the day, is normally considered to be personal notwithstanding any business-related travel during the day.

Scenario 2

In the second scenario, where an employee makes a work-related stop at a particular point of call during the trip from home to his or her regular place of employment, or vice versa, the primary purpose of the trip must be determined in deciding whether or not it is business-related.

In addition, you must consider whether the particular point of call constitutes a work location to which an employee regularly reports. This can only be determined after reviewing all of the facts including the frequency to which a particular location is visited, and the degree of travelling required by the employee regardless of the destination. An employee may have more than one regular work place, and this place may change from time to time. If an employee, whose regular place of work is the office, is required to regularly and habitually visit a particular site, then this site may also constitute a work location from which the employee regularly performs the duties of employment. Accordingly, travel from home to this site would, likely, be considered personal.

If an employee stops at a point of call (other than a place of work to which he or she regularly reports) before proceeding to the office, and the primary purpose of the trip is employment-related, then this trip will be considered business-related. However, notwithstanding the earlier work-related stop, travel home from the office at the end of the day, will still be considered personal.

As noted in your correspondence, it is our view that existing case law supports our position that travel between home and the employee's regular place of work is considered to be personal. The fact that the employee has to travel out of the office during the day does not, in our view, alter this position.

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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