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.
Our file Notre référence
5-9673
J.D. Jones
(613) 957-2104
MAY 30 1990
Re: Automobile Standby Charge
This is in reply to your letter of February 12, 1990, wherein you requested a ruling with respect to the assessment of an automobile standby charge by your employer in the following situation.
Your employer
We advise that the computation of a standby charge for an automobile has application where an employer or a person related to the employer made an automobile available (whether or not for personal use) to an employee or a person related to an employee.
Where an employee drives an average of fewer than 1,000 personal-use kilometres per month in a taxation year, the employee may be entitled to a reduced standby charge that is equal to the amount obtained when the "general" standby charge is multiplied by the percentage that the actual personal-use kilometres are of 1,000 for each 30 days the automobile is available in the year. This reduced standby charge is applicable provided the employee is required by the employer to use the automobile in connection with, or in the course of, the office or employment, and "all or substantially all" of the distance travelled by the automobile during the days in the year that it is available to the employee is in connection with, or in the course of, the office or employment. The Department considers the phrase "all or substantially all" to mean at least 90% of the distance travelled being in connection with, or in the course of, the office or employment.
In your situation, as described above, in order to reduce the standby charge (provided the criteria as outlined above are applicable), records should be maintained by your employer or by yourself of the days in the year the automobile was available and the personal-use kilometres driven during those days. We would point out that the Department considers personal use to include travel between the employee's place of work and home even though the employee may have to return to work after regular duty hours. An exception to this view occurs, however, where the employer requires or allows the employee to proceed directly from home to a point of call other than the employer's place of business to which the employee reports regularly, or to return home from such a point. These particular trips are not considered to be of a personal nature. We have enclosed the Department's Interpretation Bulletin, IT-63R3 on the subject of automobile benefits including the standby charge.
We trust our comments will be of assistance.
Yours truly,
for Director
Business and General Division
Specialty Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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