4 April 2011 External T.I. 2011-0392721E5 - Parking Expenses

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.

Principal Issues: 1. Are parking expenses at different worksites a deductible employment expense?
2. What is an employer's liability when completing a T2200?

Position: 1. It is a Question of Fact.
2. While the employer is required to certify that the requisite conditions of employment have been met, the employer is not required to actually determine whether the expenses are deductible under section 8 of the Act. A completed and signed Form T2200 does not provide the employee with any assurance that such expenses will be deductible since the Act contains other criteria that the employee must also satisfy.

Reasons: 1. Paragraph 8(1)(h.1) of the Act permits a deduction for motor vehicle expenses incurred by an employee in the course of performing the duties of employment where the individual is required to carry on those duties away from the employer's place of business or in different places and is responsible for such expenses. This can only be determined on a case by case basis through a review of all relevant facts in each situation.
2.Subsection 8(10) of the Act requires the employer to certify that the conditions for claiming travel expenses are met by the employee for the particular year in order for the expenses to be deductible from employment income. However, we would expect an employer to issue a Form T2200 only where an employee has reasonable grounds to make such claims.

XXXXXXXXXX
									2011-039272
									Brenda White
									519-645-5454
April 4, 2011

Dear XXXXXXXXXX :

Re: Parking Expenses

This is in response to your letter of January 6, 2011 wherein you asked whether certain employees would be eligible to claim parking expenses at various worksites. You also asked about an employer's responsibility with respect to signing Form T2200 "Declaration of Conditions of Employment" ("T2200").

You have described a situation where unionized glaziers ("the Employees") report to worksites for various employers for durations of a day up to weeks and months. Employees incur parking expenses for their personal motor vehicles at the respective worksites. The Employees are requesting that each employer sign a T2200 to facilitate claiming a deduction for their parking expenses.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advanced Income Tax Rulings", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.

Chapter 3 of CRA Guide T4044 "Employment Expenses" discusses the types of expenses that an employee not earning commission income may deduct from employment income. It explains that an employee may deduct motor vehicle expenses incurred for travel in the course of employment (which might include parking costs) provided all the conditions in paragraph 8(1)(h.1) of the Income Tax Act (the "Act") are met. In part, paragraph 8(1)(h.1) of the Act permits a deduction for motor vehicle expenses incurred where the individual is required to carry out his or her employment duties away from the employer's place of business or in different places, and the employee is required by the contract of employment to pay such expenses. A completed Form T2200 is also required.

Generally the CRA considers the place where a contract is being carried out as being the employer's establishment to which the employee ordinarily reports for work. Consequently, it is the CRA's view that any location at or from which an employee regularly reports for work or performs the duties of employment, is considered to be a regular place of employment. Paragraphs 14 and 49 of Interpretation Bulletin IT-522R, "Vehicle, Travel and Sales Expenses of Employees" indicate that travel between an employee's home and the place where that employee reports for work is generally considered to be personal travel and not employment-related travel. This means that expenses related to that travel, such as vehicle, public transportation or parking costs would normally not be deductible.

However, of particular relevance to this discussion in the construction industry context are the principles established by the Federal Court of Appeal in a case called "Dionne v. the Queen", 2006 DTC 6146. Based on the judgment in the Dionne case, if an employer does not maintain a significant field office at or near a particular worksite, it is our general view that such a worksite would not normally be considered as the employer's place of business or the employee's regular place of employment for purposes of deducting motor vehicle expenses.

It may be that the position described above applies to some of the worksites involved in the situations described in your letter. However, it remains a question of fact that can only be determined on a case-by-case basis as to whether any given work location would be considered a place of business of a particular employer and/or a regular place of employment of a particular employee.

Pursuant to subsection 8(10) of the Act, Form T2200 is the prescribed form which must be signed by an employer in order for an employee to claim specified deductions for employment-related expenses. The words of subsection 8(10) of the Act indicate that by signing the form, the employer certifies that the required conditions set out in the relevant deduction provisions in the Act are met. It follows that the best course of action is for the employer to be reasonably certain the employee meets the conditions before signing Form T2200.

We note that although the signing of Form T2200 by the employer is a prerequisite in order for an employee to be able to claim a deduction for employment expenses, a signed T2200 does not provide an employee with any assurance that any expenses incurred are deductible since the Act contains other criteria that the employee must satisfy.

We trust these comments will be of assistance.

Yours truly,

Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch