13 September 2010 External T.I. 2010-0374941E5 - Personal Use of an Automobile

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: Various scenarios regarding travel to and from home in an employer-provided automobile.

Position: Generally will be personal use except travel directly from home to a point of call other than the place of business to which the employee regularly reports, or to return home from that point.

Reasons: Travel between home and an employee's regular workplace is personal use.

XXXXXXXXXX
								2010-037494
								Rita Ferguson
								519-645-5261
September 13, 2010

Dear XXXXXXXXXX :

Re: Personal use of a company automobile

This is in response to your letter of July 15, 2010 in which you present a number of scenarios involving travel in an employer-provided automobile. Bylaw enforcement and building inspection services are currently provided by staff using their own vehicles. The region is now considering purchasing and providing automobiles to the staff (the "Building Inspector", "Bylaw Enforcement Officer" or the "Employee") for carrying out these duties. You have requested our comments as to whether the situations you have described would be considered personal use of a company automobile.

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.

The CRA's views on personal use of an employer-provided vehicle are provided in Interpretation Bulletin IT-63R5, "Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer - After 1992". Personal use includes 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 occurs, however, where the employee proceeds directly from home to a point of call, other than the employer's place of business to which the employee regularly reports, or returns home from such a point. The use of the vehicle for such travel is considered employment-related, not personal.

Whether an employee regularly reports for work at a particular location is a question of fact requiring a review of all the relevant facts of each case. In the CRA's view an employee may have more than one regular place of employment and, in fact, it is the nature of some employment situations that more than one location may be viewed as a regular workplace. An employee who reports to work at a particular site for an extended period of time will likely be considered to regularly report to work at such location. On the other hand, even though an employee may change location on a frequent basis, it will also be relevant to consider whether such employee reports for work at a particular location more than once, and the frequency of such returns.

Accordingly, where a Building Inspector completes a building inspection and travels from the construction site at the end of the day to his home, the travel would not be considered personal use. Similarly, where the Building Inspector travels the next morning from his home directly to another inspection at another construction site, such travel would not be considered personal use. In both cases we are assuming that the construction sites will vary with sufficient frequency that none would be considered a regular workplace. If, however, the Building Inspector proceeds directly to his office the next morning instead, that portion of the travel (from home to his regular workplace) would be considered personal.

Where a Building Inspector who lives partway between two of the employer's offices travels from office A to his home at the end of one day, and then travels from his home to office B at the start of the next day, both trips will be considered personal if both office A and B are regular places of employment for that Employee.

The final scenario you describe is that of a Bylaw Enforcement Officer who travels home from the office at the end of the day in an employer-provided automobile because his duties the next day will require that he travel beyond the location of his home. Generally the trip home would be personal use, but, assuming that the duties of the next day do not begin at another regular workplace of that Employee, travel the next morning would not.

We trust that these comments have been of assistance.

Yours truly,

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