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 use of employer provided automobile is personal in different situations such as travel between home and hotel or airport; travel to competitor on way to work or home. What constitutes regular workplace.
Position:
Question of fact. Travel from home to regular workplace is personal. Primary purpose of trip must be considered for work related stop on way home or to regular workplace. Travel to hotel is work-related where it is for business purposes.. Travel to airport probably employment related. Travel to warehouse depends on whether warehouse is owned or managed by employer.
Reasons:
Consistent with other positions taken
October 28, 1999
Employer Compliance Audit HEADQUARTERS
Toronto West Tax Services Office Wayne Antle
(613) 957-2135
Attention: Mario Taddeo
7-991253
Personal Use of Employer Provided Automobile
This is further to your fax sent on May 7, 1999 concerning what constitutes personal use of an automobile by an employee. The client's letter outlines several scenarios and asks for our comments on whether the use of the automobile in each case would be considered personal.
The determination of whether or not an automobile is used for employment-related purposes can only be made after considering all of the facts. Since the circumstances are likely to differ from one case to the next, the Department has not established any specific criteria or guidelines in this regard.
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 employee's regular place of employment and home is personal. An employee's regular workplace is usually the location at or from which the employee reports for work or performs the duties of employment. 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, occurs where an employee proceeds directly from home to a point of call other than the employer's place of business, or returns home from such a point. These particular trips are generally not considered personal. However, if the employee makes a work-related stop during the trip from home to his regular place of employment, or vice versa, you must look at the primary purpose of the trip to determine whether or not it is personal.
As noted above, the determination of whether an automobile is used in connection with an office or employment can only be made after reviewing all of the facts. Nevertheless, we offer the following comments on the situations outlined in the client's letter. First, in summarizing Revenue Canada's position, it is the client's understanding that travel between home and a XXXXXXXXXX location is considered personal, as well as travel between different XXXXXXXXXX locations to perform the duties of employment. In our view, travel from home to a company facility is considered personal. However, travel between various facilities would probably be considered employment related.
With respect to travel from home to the warehouse, which is owned by XXXXXXXXXX, more information is required in order to determine if the trip is employment related or personal. Where the employer owns or manages the facilities to which employees travel, and they must travel there with some regularity in the course of their employment, then we would expect that, prima facie, the employees' travel to the facilities from home would be personal.
We will now address the other scenarios listed in the client's letter:
1. A district manager is responsible for a group of stores, with a desk and assistant located in one store. He is required to regularly visit the other stores in his region. In our opinion, it is likely that the other stores would also be considered regular workplaces, and travel to them from home would be personal.
2. A district manager drives to a competitor, or drives to a hotel, before going to a XXXXXXXXXX store. The trip to the competitor would likely be considered employment related if it was undertaken at the direction of, or with the concurrence of the employer. However, where the employee stops at a competitor on the way to the store from home, you must look at the primary purpose of the trip to determine if it is personal or employment related. The trip to the hotel, and then the XXXXXXXXXX store, would probably be considered employment-related where it is made for business purposes at the direction of, or with the approval of the employer, and the stay at the hotel is not such that the hotel constitutes a temporary residence.
3. The district manager drives to a hotel, then a competitor, and finally a store. Again, this trip would probably be considered employment-related where it is undertaken at the direction of, or with the concurrence of the employer, and it is for business purposes.
4. An employee drives to the airport for a business trip. In our opinion, travel to the airport would likely be considered employment related in this circumstance.
R. Albert, C.A.
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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