19 February 2014 External T.I. 2013-0484761E5 - Taxable Benefits – Employer-Provided 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 would arise in connection with an employee's use of an employer-provided vehicle?

Position: Question of fact.

Reasons: Previous positions. Where the motor vehicle is an "automobile" as defined in subsection 248(1), a standby charge and operating benefit will arise under paragraphs 6(1)(e) and 6(1)(k) with respect to the personal use. Where the motor vehicle is not an "automobile", a taxable benefit will arise under paragraph 6(1)(a) with respect to any personal use.

XXXXXXXXXX
2013-048476
T. Baltkois

February 19, 2014

Dear XXXXXXXXXX:

Re: Taxable Benefits – Employer-Provided Vehicles

We are writing in response to your letter dated March 21, 2013, in which you asked whether an employee's use of an employer-provided vehicle would give rise to a taxable benefit under the Income Tax Act (the Act).

In the situation described, certain employees of the XXXXXXXXXX (the employer) are provided with an employer-owned motor vehicle to use in the performance of employment duties. During a typical work day, these employees travel in a personal vehicle from their homes to an employer-owned facility (1st location) where the employer-provided motor vehicles are parked. After picking up an employer-provided motor vehicle from the 1st location, the employer requires the employees to travel to another employer-owned location (2nd location) to perform certain employment duties. Employees then travel from the 2nd location in the employer-provided motor vehicle and perform employment duties within a designated geographic area. At the end of the work day, employees proceed from their last scheduled work stop to the 1st location and return the employer-provided motor vehicles. Employees then proceed home from the 1st location using their personal vehicles.

You have asked us to provide comments as to whether the travel between the 1st location and the 2nd location at the start of the work day would be considered personal or employment-related travel.

Our Comments

This technical interpretation provides general comments about the provisions of the Income Tax Act and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R5, Advance Income Tax Rulings.

Generally, a taxable benefit arises for an employee where the employee uses an employer-provided motor vehicle for personal travel. Although it is a question of fact whether the employee's travel is personal or employment-related, it is the longstanding position of the Canada Revenue Agency (CRA) that travelling between an employee's home and his or her regular place of employment (RPE) is personal travel. Where, however, an employer requires an employee to travel directly from a location that is his or her RPE to another location (i.e. a point of call or another RPE), such travel is generally considered employment-related and would not result in a taxable benefit to the employee.

Any location at or from which an employee regularly reports for work and performs the duties of employment is generally considered a RPE for that employee. The determination as to whether a particular work location is a RPE for an employee is always a question of fact. It should also be noted that an employee may have more than one RPE.

In general, a location at which an employee picks up an employer-provided motor vehicle would not likely be considered a RPE, unless the employee was required to perform employment-related duties there. It is also unlikely that such a location would be considered a point of call.

Factors that may indicate that a pick-up location is a RPE for employees could include the following:

• the employer requires the employee to pick up the motor vehicle on a regular basis and at a specific time;
• the employee is paid by the employer from the time that he or she picks up the motor vehicle, until the motor vehicle is returned at the end of the work day;
• evidence that picking up the motor vehicle is a required duty of employment;
• evidence that the employee is required to perform employment-related duties in the motor vehicle or in connection with the motor vehicle prior to departing the pick-up location;
• the employee is entitled to receive workers' compensation benefits in respect of injuries he or she may sustain in the employer-provided motor vehicle while travelling from the pick-up location to a point of call or RPE.

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