29 October 1996 External T.I. 9632355 - TRAVEL DIFFERENTIAL FOR DND VS. OTHER INDIVIDUALS

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 military employee can deduct as travel costs for relocation the difference between DND per kilometre amount (9.5 cents per km.) and the amount paid for federal civil servants

Position:

no but can deduct any actual travel costs over and above the amount of the allowance/reimbursement

Reasons:

must represent an amount "paid" per 62(1). See also TOM 19(25)(18).4

									963235
XXXXXXXXXX							Sandra Short

October 29, 1996

Dear XXXXXXXXXX:

Re: Travelling expenses paid during Relocation

This is in reply to your letter of September 22, 1996, which asks whether you may claim, as moving expenses, an amount which represents the difference between the per kilometre mileage rate paid by the Department of National Defence (9.5 cents per kilometre) and another rate given to federal employees.

The Income Tax Act permits a taxpayer to deduct "moving expenses" in defined situations. The term "moving expenses" is defined to include, among other things, any expense incurred as or on account of "travel costs." Specifically, subsection 62(1) of the Act permits a taxpayer to deduct "...amounts paid by the taxpayer as or on account of moving expenses..."

If your actual travel costs exceeded the amount for which you have been reimbursed by the Department of National Defence, you will have "paid" an amount over and above the amount of the reimbursement. Proof of these additional costs can result in an adjustment to your income tax returns for the years in question. We refer you to your local tax services office for these adjustments. XXXXXXXXXX is served by the XXXXXXXXXX. We would point out, however, that there is no provision in the law which deems an amount to have been paid by you when the "amount paid" is arrived at by calculating the difference between the rate paid by your employer and any higher travel rate which may be paid to other individuals under different circumstances.

We trust our comments will be of assistance to you.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch