4 March 1998 Internal T.I. 9722576 - employer provided automobiles

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.

March 5, 1998

Verification Division Resource Industries Section
A.H. Gowling Denise Dalphy
Acting Director (613) 957-9231

972257

Regular Place of Employment
Employer Provided Automobiles
XXXXXXXXXX

This is in reply to your memorandum dated August 20, 1997 where you requested that we confirm your interpretation of the phrase “regular place of employment” and that we provide comments on XXXXXXXXXX of June 18, 1997.

XXXXXXXXXX has described several situations where they would like the Department to change its positions on the imposition of benefits (or the quantum of benefits included in income) where employees are provided with automobiles by their employers. XXXXXXXXXX refers to United States regulations in support of its views (such as Reg. 161-21(3), for example, concerning the $1.50 commuting rule). XXXXXXXXXX proposals require Revenue Canada to amend or ignore the income tax legislation concerning automobile benefits, which, of course, is beyond our mandate.

The Department’s position on the benefits that must be attributed to employees who are provided with automobiles by their employers is set out in IT-63R5. In addition to what would obviously be considered personal use of a motor vehicle supplied by an employer, the Department’s long-standing position is that travel between an employer’s place of work and home is personal. We agree with you that the fact that an employee who is provided with an automobile because he or she is on-call or has a long commute to work would not transform personal travel into business travel. Notwithstanding the fact that an employer may require an employee to take an automobile home (for whatever reason), travel from the employee’s home to the regular place of employment is personal.

With respect to situations where employees must travel from home to various field locations to undertake such duties as XXXXXXXXXX, it is a question of fact whether they are traveling to various employer locations or they are traveling to clients’ establishments, that is, whether the travel is business travel or personal travel. Where the employer owns or manages the facilities that the employee is traveling to, we expect that, prima facie, the employee’s travel to these locations would be personal.

			                                    XXXXXXXXXX 

An employee’s regular place of employment or workplace is usually the location at or from which the employee reports for work or performs the duties of employment. As stated in your memorandum, an employee may have more than one regular place of employment. In fact, it is the nature of some employment situations that there may be more than one location which may be viewed as a regular workplace. The regular workplace may change from time to time, and travel from an employee’s home to a temporarily different workplace is personal, not business, travel.

An exception to the general rule that travel to work is personal, is where an employee proceeds directly from home to a point of call other than the employer’s place of business (e.g., effecting repairs at a customer’s premises) or returns home from such a point. These particular trips are not considered personal.

Another exception is where an individual is required by the employer to have an office in the home and that is essentially where the individual’s employment duties are based. In these circumstances, the office would be considered a regular place of work of the individual and travel from this regular place of work (the individual’s residence) to another location, other than the employer’s, in connection with the individual’s employment duties would be business related and not personal travel.

XXXXXXXXXX. The Department cannot apply the stand-by charge differently for remote workers than for any other employees and the income tax legislation does not provide blanket relief from the taxation of employees on automobile benefits for workers who travel in remote areas. However, the Income Tax Act does provide relief for persons employed in special work sites or remote locations, as described in subsection 6(6) of the Act, and for persons living in prescribed northern or intermediate zones, as described in section 110.7 of the Act. In this regard, the comments in IT-91R4, especially paragraph 9, would be relevant.

Finally, XXXXXXXXXX asks us to consider that many employees are required to use specialized vehicles. We wish to mention that the standby charge in paragraph 6(1)(e) of the Act and the operating expense benefit in paragraph 6(1)(k) of the Act only apply to “automobiles” as defined in 248(1); where a motor vehicle that is not an “automobile” is provided to an employee, paragraph 23 of IT-63R5 describes how the benefit should be computed.

If you encounter any particular situation where there is some uncertainty as to whether a particular credit should be included in income, we would be pleased to provide you with our views.

If we can be of further assistance please contact the writer.

R.S. Biscaro, CA
Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
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