21 July 1994 External T.I. 9412065 - REIMBURSEMENT OF PHYSICAN FEE TO RENEW DRIVER'S LICE

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

whether the reimbursement of the cost charged by a physician to fill out forms to renew an employee's Class A driver's license is a taxable benefit where the holding of such a license is a job requirement

Position TAKEN: no

Reasons FOR POSITION TAKEN:

look to who is the primary beneficiary of the payment of expense- while the payment of what is normally considered a personal expense is a taxable benefit, it will not be where the facts show that the expense was a requirement of the job - see EC0527 - the present letter only deals with Class A licenses which require a physician's certification of the employee's medical health and not a regular Class G license (i.e. maintenance of a Class A license as opposed to Class G is more likely to be linked to an employer imposed requirement)

A. Humenuk

XXXXXXXXXX			941206

Attention: XXXXXXXXXX

July 21, 1994

Dear XXXXXXXXXX:

Re: Reimbursement of Employee's Expenses

We are replying to your letter of May 2, 1994 concerning your custodial staff.

You advise that the collective agreement covering the custodial staff of the XXXXXXXXXX requires the Board to reimburse an employee for the fees charged by a physician to complete the medical forms necessary for the employee to renew the employee's Class A driver's license where the employee is required to hold that class of license as a condition of employment.

Whether or not a taxable benefit arises from an employer's reimbursement of an expense incurred by the employee depends upon whether the expense was incurred primarily for the benefit of the employee or the employer. In the absence of evidence to the contrary, the payment of a personal expense of an employee benefits the employee first and foremost and thus a taxable benefit arises where the employer reimburses the employee for such an expense. However, where it is established that the expense was incurred primarily to fulfil a condition of employment, the reimbursement of such an expense by the employer will generally not be a taxable benefit to the employee.

Accordingly, where the facts show that the employee is required to pay a physician's fee as a condition of employment either directly or indirectly (i.e. as a requirement to fulfil the job-related requirement to hold a Class A driver's license), the reimbursement of that fee will not be considered a taxable benefit to the employee.

Please note that where the physician's fee is not considered to be a condition of employment, the reimbursement will not be considered a taxable benefit if it is reimbursed under a private health services plan as described in attached Interpretation Bulletin IT-339R "Private Health Services Plan".

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch