6 September 1990 Ministerial Correspondence 900944 F - Automobile Allowances Paid to Clergymen

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.

September 6, 1990

Dear Sirs:

Re:  Automobile Allowances Paid to Clergymen

We are replying to your letter of May 18, 1990, concerning the characterization of mileage driven by a salaried member of clergy. 

You state that  24(1)  In the attached letter form your client a number of situations are described which involve travelling by an employee who is a member of the clergy.  You ask what portion of the mileage described in the letter constitutes reimbursable mileage.

The Income Tax Act does not impose limits on how much an employer can reimburse its employees for the use of their vehicles as an allowance by rather sets our the rules to determine whether or not the entire allowance is included in income from employment.  As stated in paragraph 48 of Interpretation Bulletin IT-522 "Vehicle and Other Travelling Expenses - Employees", an allowance paid to a minister or clergymen in charge of or ministering to a diocese, parish or congregation is not included in income if it represents a reasonable allowance for expenses related to transportation incident to the discharge of the duties of his or her office or employment.

For the purpose of our response we assume that the church is a place to which the minister regularly reports for work.  It is our view that expenses incurred travelling directly between home and the church are considered personal and are not incident to the discharge of the duties of office or employment.  This is so regardless of the number of such trips within the day, the time of day, whether or not the travel was unexpected or whether the minister maintains an office in the home.

In response to your specific questions, therefore, we advise as follows:

1.     None of the mileage described in the first example is considered incident to the discharge of the duties of employment.

2.     The travel from the member of the clergy's home to the church is considered personal whereas the travel from the church to the hospital and then to home is considered employment-related as stated in paragraph 5 of Interpretation Bulletin IT-63R3 "Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer".

3.     Similarly, the travel from home to the memorial service and then to the church is considered employment-related but the travel from the church to home is considered personal.

4-6.     None of the mileage described in examples 4, 5, and 6 is considered incident to the discharge of the duties of employment.

7.     Paragraphs 31 and 40 of IT-522 outline the general conditions required in order for a member of the clergy who is in an employment relationship with the church to claim automobile expenses.  As stated in paragraph 31 of that bulletin, one of the conditions that must be present in order to claim travelling expenses is that the employee not be in receipt of an allowance which is otherwise non-taxable.  A member of the clergy who receives a reasonable allowance for automobile expenses (having regard to our previous comments concerning personal use) does not have the option of including the allowance in income when it is otherwise considered to be non-taxable.

We trust our comments will be of assistance to you.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch