11 August 1988 Income Tax Severed Letter 5-6271 - [Faculty Member's Reimbursement]

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.

A. Humenuk (613) 957-2123

August 11 1988

Dear Sirs:

Re: Faculty Member's Reimbursement

We are responding to your letter of June 17, 1988, and subsequent telephone call (Humenuk/ XXXX wherein you requested our views as to whether a taxable benefit would arise in the situation where an employer reimburses an employee for the parking fee which the employer regularly charges users of the parking spaces at its place of business.

You have stated that the employees are entitled to a reimbursement of certain expenses up to an annual maximum amount called a professional development allowance. This allowance presently covers the cost of seminars and courses needed to upgrade the employee's knowledge of his field and it is proposed to expand the range of items to be reimbursed to cover the regular parking charges at the University.

You have stated that Revenue Canada has previously confirmed that the reimbursement of course fees is not a taxable benefit. As we do not appear to have a copy of this previous correspondence, we are not prepared to comment on this issue at this time. It is our view that the taxability of the parking fee reimbursement can be considered separately from that of the reimbursement of seminar fees. It should be noted that the cost of parking a vehicle (other than a vehicle used to carry out duties of employment) at the employer's place of business is considered a personal expense in the same manner as is driving to and from work.

Although it is the Department's practice not to assess a benefit in those situations where the value of the parking benefit cannot be determined, such as when there is no identifiable cost to either employer or employee, a taxable benefit under paragraph 6(1)(a) of the Income Tax Act (the "Act") is conferred on an employee when the value of the parking benefit can be readily determined. Similarly, the reimbursement of a personal expense of an employee, in circumstances similar to that of an employee receiving a taxable benefit, is taxable under paragraph 6(1)(a) of the Act. Based on the information provided to us, it would appear that the reimbursement you have described would be taxable under paragraph 6(1)(a) of the Act.

Yours truly,

for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch