29 October 2007 External T.I. 2007-0225901E5 - Clearly Marked Emergency-Response Vehicles

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 a taxable benefit results in respect of the personal use of an employer-provided motor vehicle that is not considered an automobile because it is a clearly marked emergency-response vehicle?

Position: If there is personal use, yes.

Reasons: Notwithstanding the fact that such a vehicle may not be an automobile, a taxable benefit in respect of the personal use of such a vehicle may result.

								2007-022590
XXXXXXXXXX 							Shaun Harkin, CMA
(613) 957-9229
October 29, 2007	

Re: Technical Interpretation Request - Personal use of emergency vehicles

This is in response to your letter of January 16, 2007, which was forwarded to our office on February 28, 2007, requesting our views on the personal use of a fire emergency-response vehicle.

Our Comments

The taxable benefit for the personal use and availability of an employer's motor vehicle that is considered an automobile, as defined in the Income Tax Act ("the "Act"), is included in the employee's income under paragraph 6(1)(e) of the Act as a "standby charge", and will depend upon factors such as whether the automobile is available for the employee's use and its personal versus business use. Where the employer pays any of the operating costs of the automobile, an "operating cost benefit" is also included in the employee's income under paragraph 6(1)(k) of the Act.

You are correct in asserting that a clearly marked emergency-response vehicle used in connection with or in the course of an individual's office or employment with a fire department or the police is not included in the definition of automobile. This is due to a specific exception in paragraph (b.1) of the definition of automobile in subsection 248(1) of the Act. However, the taxable benefit for the personal use of a motor vehicle that is not an automobile is included in the employee's income under paragraph 6(1)(a) of the Act. The amount of the benefit is based on a reasonable calculation of the value of the benefit derived by the employee, which can vary in differing circumstances depending upon such factors as personal use.

In this regard, use of an employer-provided motor vehicle by an employee to travel between his or her home and regular place of employment is considered personal. This is so notwithstanding the fact that the vehicle may be required because an employee is on call for emergency purposes. However, where the employee proceeds directly from home to a point of call other than the employer's place of business to which the employee regularly reports or returns home from such a point, use of the vehicle is not considered personal. The CRA's general position on what constitutes personal use of an employer-provided motor vehicle is discussed 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".

We trust that these comments will be of assistance to you.

Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch