13 February 2013 External T.I. 2012-0443811E5 - Special Work Sites

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: 1. Whether a city can be considered a special work site? 2. Whether travel between a temporary place of residence and a special work site is considered personal travel?

Position: 1. No. 2. Yes.

Reasons: 1. Consistent with case law, the location at which an employee performs duties of a temporary nature is intended to be a specific place. 2. Employer-provided transportation between an employee's temporary residence and RPE at a special work site would be considered personal in nature, would give rise to a taxable benefit under paragraph 6(1)(a) of the Act, and would not be exempt under paragraph 6(6) of the Act.

XXXXXXXXXX
2012-044381
T. Baltkois

February 13, 2013

Dear XXXXXXXXXX:

Re: Special Work Sites

We are writing in response to your email dated April 10, 2012, in which you requested our comments as to whether a city can be considered a special work site and whether an employee's use of an employer-provided vehicle would give rise to a taxable benefit in certain situations. In the scenario described, an employee is required to by his or her employer to leave their principal place of residence to work on several jobs located in or around one specific city.

Generally, subsection 6(1) of the Income Tax Act (the "Act") provides that all benefits and allowances received or enjoyed by an employee from an office or employment are taxable unless specifically excluded by another provision of the Act. Subsection 6(6) of the Act provides an exemption where an employee is working at a "special work site" or "remote work location", provided that certain conditions are met. These criteria are discussed in greater detail in Interpretation Bulletin IT-91R4, Employment at Special Work Sites or Remote Work Locations. For purposes of the exemption in subsection 6(6) of the Act, the location at which an employee performs duties of a temporary nature (i.e. special work site) is intended to be a specific location and not a general geographic area such as a city.

Where an employee meets the requirements of subparagraph 6(6)(a)(i) of the Act in respect of a special work site, the value of employer-provided transportation for an employee's travel between his or her principal place of residence and a special work site, albeit personal in nature, would not give rise to a taxable benefit by virtue of the exemption provided by paragraph 6(6)(b) of the Act.

However, employer-provided transportation related to an employee's travel between a temporary place of residence and his or her regular place of employment ("RPE") at a special work site would be considered personal in nature, would give rise to a taxable benefit under paragraph 6(1)(a) of the Act, and would not be exempt under paragraph 6(6)(b) of the Act. A temporary place of residence is any location other than an employee's principal place of residence, where he or she stays while performing employment duties at a special work site; and may include (but are not limited to) a hotel, camp, or rental home.

While it is always a question of fact whether a special work site is a RPE for an employee, it is the view of the Canada Revenue Agency that a particular location may be considered a RPE even though an employee may only report to work at that particular location on a periodic basis (e.g., once or twice a month) during the year.

Even where the conditions of subsection 6(6) of the Act are not satisfied, an employee's use of an employer-provided vehicle may not give rise to a taxable benefit in situations where the travel is considered employment-related. For a more detailed discussion on tax implications of employer-provided travel, meal and lodging expenses, please refer to Interpretation Bulletin IT-522R, Vehicle, Travel and Sales Expenses of Employees.

We trust these comments will be of assistance to you.

Yours truly,

Nerill Thomas-Wilkinson, CPA, CA
Manager
for Director
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch