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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
PRINCIPAL ISSUE:
XXXXXXXXXX
Position TAKEN:
Yes.
Reasons:
If the primary purpose of a trip is personal in nature, then it is treated as such for tax purposes regardless of any employment activity that may take place during the course of the trip.
XXXXXXXXXX . T. Young, CA
2003-000974
May 15, 2003
Dear XXXXXXXXXX:
Re: Personal Use of Vehicles
We are writing in response to letter of March 20, 2003, regarding the personal use of vehicles by employees.
XXXXXXXXXX
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 ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. However, we are prepared to provide the following comments, which may be of assistance to you.
Where the primary purpose of a particular trip is personal in nature, it is treated as such for tax purposes regardless of any employment activity, which may take place during the course of that trip. Specifically, travel between an employee's personal residence and the employer's place of business where the employee ordinarily reports for work is generally considered personal in nature. This position is not altered by the fact that the employer may require the employee to perform an employment-related function (such as testing the performance of a vehicle) during the course of the trip. The primary purpose of any such trip is always a question of fact.
The same is true for the long distance trips. If the primary purpose of the trip is personal in nature, the fact that the employer is also receiving a benefit from the trip does not alter the fact that the employee has received a personal benefit (i.e., not having to use his or her own personal vehicle for the trip).
Although, we do not agree with your view that all travel while testing data is recorded is business use, we note that the 2003 Federal Budget included a proposal for calculating a reduced standby charge where the personal use of a vehicle is less than 1,667 kilometres for each 30 days the vehicle is available during the year. This proposed change may provide some relief in your situation.
The documents referred to above may be found on our web site at www.ccra.gc.ca.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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