5 June 2008 External T.I. 2008-0270191E5 - Motor Vehicle Expenses

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: In light of the Tax Court of Canada (TCC) decisions in Campbell v. The Queen (2003 DTC 420); Toutov v. The Queen (2006 DTC 2928); and Emmons v. The Queen (2006 DTC 2885), are employees entitled to deduct parking and motor vehicle expenses for travel between a home office and their employer’s business office under paragraphs 8(1)(h) and (h.1), respectively, of the Act.

Position: No.

Reasons: Those decisions are informal and very fact specific and therefore, we have not adopted any change in our general policy that travel between a home office and an employer’s place of business would be personal travel.

XXXXXXXXXX 							2008-027019
								Michael Cooke
June 5, 2008

Dear XXXXXXXXXX ,

Re: Travel and Motor Vehicle Expenses

We are writing in response to your letter of February 26, 2008, concerning the above-noted issue.

Briefly, in your letter you indicate that you are an employee who primarily works from an office in your home (“home office”). You also indicate that you are also required to report for work at your employer’s business office in Regina (“employer’s office”) at various times throughout the year. In light of the Tax Court of Canada (TCC) decisions in Campbell v. The Queen (2003 DTC 420); Toutov v. The Queen (2006 DTC 2928); and Emmons v. The Queen (2006 DTC 2885), you ask whether you are entitled to deduct your parking expenses and motor vehicle expenses for travel between your home office and the employer’s office under paragraphs 8(1)(h) and (h.1), respectively, of the Income Tax Act (the “Act”).

Our Comments

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 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 offer the following comments.

The Canada Revenue Agency’s general position is that travel between an employee’s home and the employer’s business location is personal, even when the employee has a home office that is a regular place of employment. While we recognize that the above-noted informal TCC decisions held that such travel may be work related, each of these cases was very fact specific. Moreover, since section 18.28 of the Tax Court of Canada Act states that informal TCC decisions are not to be treated as a precedent for any other case, our general position remains unchanged. As such, it is our view that any motor vehicle or parking expenses you incurred for travel between your home office and your employer’s office would not be deductible.

We trust our comments will be of assistance.

Yours truly,

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