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.
MINISTER'S OFFICE (6) ADM 950882
DEPUTY MINISTER'S OFFICE (3)
ASSOCIATE DEPUTY MINISTER (1)
ASSISTANT DEPUTY MINISTER'S OFFICE (2)
RETURN TO 15TH FLOOR, ALBION TOWERS July 5, 1995
MEMORANDUM FOR THE HONOURABLE DAVID ANDERSON
SUBJECT: DEDUCTIBILITY OF PARKING COSTS AND BUS PASSES
As requested, this memorandum is to brief you on the deductibility of parking costs as a business expense as well as the deductibility of bus passes purchased for employees by employers.
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Where an employer pays an employee's parking expense, that expense is deductible to the employer as a business expense. Where the employer provides parking facilities, the costs associated with the facilities are either deductible as a current expense or capitalized as an expenditure on real property. For example, maintenance or repair costs to an employer's garage or parking lot are deductible as a current expense but the cost of building or expanding a parking structure would be capitalized with annual capital cost allowance being allowed as a deduction.
Where an employer pays employees' parking cost or provides parking facilities to employees at a cost to the employees that is less than the market value, a taxable benefit is conferred on the employees. However, there is no taxable benefit where the parking is provided for business purposes; that is, employees are required to use their automobiles on a regular basis in carrying out their employment duties.
An annual bus pass is normally acquired by an employee for the purposes of travelling between the home and the work place. Such travel is considered a personal activity and as such the costs associated with it would be considered a personal or living expense.
Where an employer pays the cost of an employee's bus pass, the expense is deductible to the employer as a business expense. However, where an employer chooses to pay or subsidize the cost of an employee's bus pass, a taxable benefit is conferred on the employee. The benefit is equal to the difference between the amount paid by the employee and the fair market value of the pass.
In summary, bus passes purchased by an employer are treated in the same manner as parking costs.
Pierre Gravelle
Sandra Short
957-2136
June 26, 1995
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© Her Majesty the Queen in Right of Canada, 1995
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© Sa Majesté la Reine du Chef du Canada, 1995
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