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:
Where an employee decides to take work from the place of employment to his or her home is the travel considered to be business related or personal?
Position:
Personal.
Reasons:
In situations where travel includes personal and employment elements, one must look at the primary purpose of the trip to determine if it is personal or employment related. Where an employee decides to take work from the place of employment to his or her home, the primary purpose of the travel is considered to be for personal reasons.
XXXXXXXXXX 2001-009312
Randy Hewlett, B. Comm.
August 31, 2001
Dear XXXXXXXXXX:
Re: Technical Interpretation Request - Business Versus Personal Use of Vehicle
We are writing in response to your letter dated July 17, 2001, wherein you requested a technical interpretation on business versus personal use of a vehicle in a specific situation we summarize below.
A Canadian controlled private corporation is carrying on an active business in Canada selling recreational products such as boats, motorcycles or snowmobiles that need repair and maintenance after purchase. The shareholder completes some repairs and maintenance outside of regular business hours to keep turnaround time reasonable. The company owns a truck that is used by the owner to conduct business activities such as banking, paying bills and meeting with customers. The truck is also used by the owner to go between the business and his principal residence at the beginning and end of each business day.
You ask whether the travel between the shareholder's principal residence and business is personal travel when the truck is used to transport products, such as the boats, home in the evening to perform the repairs. You indicate that during regular hours the shareholder may be too occupied with customers to repair the boats and must take them home in the evening so they can be completed by the next day. In your view, there is a valid reason for repairing the products at the shareholder's principal residence; it would be inefficient to travel back to the business in the evening to complete the repairs because of lost time due to the distance.
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 submitted in the manner set out in Information Circular IC 70-6R4, Advanced Income Tax Rulings, dated January 29, 2001. 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 a motor vehicle is used for employment-related purposes can only be made after considering all of the facts. Since the circumstances are likely to differ from one case to the next, no specific criteria or guidelines have been established in this regard. The position on the benefits that must be attributed to employees who are provided with motor vehicles by their employers is set out in Interpretation Bulletin IT-63R5, Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer - after 1992.
As indicated in paragraph 5 of IT-63R5 travel between the employee's place of work and home is personal travel. In situations where travel includes personal and employment elements, one must look at the primary purpose of the trip to determine if it is personal or employment related. Where an employee decides to take work from the place of employment to his or her home, the primary purpose of the travel is considered to be for personal reasons.
We trust our comments will be of assistance to you.
Yours truly,
Terry Young, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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