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 an employer's reimbursement or allowance in respect of transportation costs for travel by an employee's family member between the employee's principal place of residence and the special work site could be excluded from the employee's income pursuant to paragraph 6(6)(b) of the Act.
Position: Question of fact.
Reasons: See above.
XXXXXXXXXX 2009-034616
Michael Cooke, C.A.
March 16, 2010
Ms. XXXXXXXXXX :
Re: Special Work Site Exemption
This is in reply to your letter dated October 15, 2009, wherein you requested our views on whether an employer's payment, reimbursement or allowance in respect of transportation costs for travel by a family member of an employee between the employee's principal place of residence and a special work site could be excluded from the employee's income pursuant to paragraph 6(6)(b) of the Income Tax Act ("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 a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.
As you noted, in technical interpretation 9627935, the CRA previously indicated that the above-described travel benefits would not be required to be included in an employee's income where all the other conditions described in subsection 6(6) of the Act are otherwise met. While we can confirm that the position described in the above-noted technical interpretation continues to represent CRA's position on this matter we would like to offer the following additional comments that may apply to the situations described in your letter.
Paragraph 6(6)(b) of the Act will generally exclude from income any amount received or enjoyed by an employee for transportation between an individual's principal place of residence and a special work site or a remote work location. This exclusion will apply where, inter alia, the employee was required by the duties of employment to be away from his principal place of residence or to be at the special work site for a period of not less than 36 hours, provided that such amount is not in excess of a reasonable amount and that the employee also receives board and lodging or a reasonable allowance for board and lodging for that same period of time from his or her employer [emphasis added].
In accordance with the discussion in paragraph 10 of IT-91R4, Employment at Special Work Sites or Remote Work Locations, where the employer reimburses or pays an allowance in respect of the employee's transportation costs for travel between the special work site and the employee's principal place of residence for a period during which the employee also received tax-free amounts from his or her employer for board and lodging, such amount would not be taxable provided all the other conditions described in subsection 6(6) of the Act are otherwise met. Where the employee is no longer required by such duties of employment to be at the special work site the employee would ordinarily be expected to immediately leave the special work site and return to his or her principal residence. However, if an employer pays or reimburses an employee for a family member's transportation costs to the special work site at the end of the employee's work period, and where that employee is no longer required by the duties of employment to remain at the special work site, it is our view that the payment or reimbursement of the family member's transportation costs to the special work site for a non-working period would result in a taxable benefit to the employee.
We trust our comments will be of assistance to you.
Yours truly,
Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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