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.
Principal Issues: Whether or not a pick-up truck used by a self-employed farmer is excluded from the definition of an automobile, and therefore also excluded from the definition of a passenger vehicle, due to the remote location of a farm.
Position: It depends.
Reasons: It is a question of fact whether or not an occupant of a vehicle is an employee at a particular work location that is a "special work site" or "remote work location". There is no indication that the truck is being used to transport employees to a "special work site" or "remote work location". Accordingly, as a self-employed farmer, the truck used in the remote farming operation does not qualify for the exclusion from the definition of automobile. Thus the truck meets the definition of an automobile and also is a passenger vehicle.
XXXXXXXXXX 2004-005725
Kathryn McCarthy, CA
March 3, 2004
Dear XXXXXXXXXX:
Re: Definitions of Passenger Vehicle and Automobile - Remote exclusion for employees
We are writing in response to your letter of December 29, 2003, concerning the definition of a passenger vehicle.
You are a self-employed farmer who purchased an extended cab pick-up truck in 2003 for $29,000, plus GST of $2,030. The truck, which has a seating capacity for more than the driver and 2 passengers, was used 75% in your farming business and 25% for personal use. Your farm is located XXXXXXXXXX miles from XXXXXXXXXX, which has a population of 40,000. All of the urban areas closer to your farm are less densely populated. You question whether or not the truck is excluded from the definition of an "automobile" under subsection 248(1) of the Income Tax Act (the Act), and therefore also excluded from the definition of a "passenger vehicle", due to the remoteness of the area in which you reside.
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. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. We are, however, prepared to provide the following general comments on the definitions of a passenger vehicle and automobile under the Act.
A "passenger vehicle" under the definition in subsection 248(1) of the Act "means an automobile acquired after June 17, 1987..." The definition of "automobile" in subsection 248(1) of the Act excludes certain pick-up trucks. For example, it excludes a pick-up truck used in the taxation year it is acquired or leased primarily for the transportation of goods, equipment or passengers in the course of earning or producing income at one or more locations in Canada. Further, with respect to any of the occupants of the vehicle, they must be employees at one or more "special work sites" or "remote work locations" that are at least 30 kilometres from the nearest urban community with a population of at least 40,000 individuals, as determined in the last census published by Statistics Canada. Interpretation Bulletin IT-91R4, Employment at Special Work Sites or Remote Work Locations, discusses the conditions that must be satisfied for the "special work site" or "remote work location" exclusions in subsection 6(6) of the Act to apply, and is available on our website at www.cra-arc.gc.ca.
It is a question of fact whether or not an occupant of a vehicle is an employee at a particular work location that is a "special work site" or "remote work location". There is no indication that your truck is being used to transport employees to a "special work site" or "remote work location". Accordingly, as a self-employed farmer, the truck used in the remote farming operation does not qualify for the exclusion from the definition of automobile. Thus the truck meets the definition of an automobile in the Act and also is a passenger vehicle.
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 Planning Branch
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