18 February 2011 External T.I. 2010-0383031E5 - T2200

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: What is the CRA's interpretation of "normally", as it relates to Question 2 on form T2200 "Declaration of Conditions of Employment"?

Position: Travel that is required to be undertaken commonly, under normal or ordinary conditions and with some degree of regularity.

Reasons: consistent with various CRA publications.

XXXXXXXXXX 								2010-038303
									Brenda White
									519-645-5454
February 18, 2011

Dear XXXXXXXXXX :

Re: T2200

This is in response to your letter of October 6, 2010 wherein you asked for clarification of the expression "normally required to work away from the office or in different places" as it relates to Question 2 of Form T2200, "Declaration of Conditions of Employment" ("Form T2200").

In the situation you described, certain employees are primarily based at and regularly work at the Employer's head office. The responsibilities of these employees include visiting account offices to showcase new products, present proposals and manage the client relationship. These visits are an expected responsibility, and may only occur once or twice a month. Additional travel for these employees may include visits to account retail stores two or three times a month to observe product placement.

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.

Pursuant to subsection 8(10) of the Income Tax Act (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 have assumed that the individuals in question are not commissioned sales employees. That being the case, in order to claim a deduction for amounts expended in a year in respect of motor vehicle expenses incurred for travelling in the course of employment they must be able to demonstrate that all the conditions of paragraph 8(1)(h.1) of the Act have in fact been met. The first condition requires that an employee be ordinarily required to carry on the duties of employment away from the employer's place of business or in different places and ties in with your question regarding Question 2 on Form T2200. In order to satisfy this condition, the employee must normally be required to travel either to locations that are not the employer's place of business, or between an employer's different locations of business.

As described in Paragraph 32(c) of Interpretation Bulletin IT-522R, "Vehicle, Travel and Sales Expenses of Employees", the expression "an employer's place of business" is generally considered to have reference to a permanent establishment of the employer such as an office, factory, warehouse, branch or store, or to a field office at a large construction job. When considering the deductibility of travel expenses or motor vehicle expenses under section 8 of the Act and whether an employee is ordinarily required to carry on the duties of the office or employment away from the employer's place of business or in different places, one of the factors that must be considered is whether the location is considered to be his or her "regular place of employment". The Courts and the CRA generally agree that the cost of traveling between an employee's home and the employee's regular place of employment is personal travel, irrespective of the distance travelled.

Accordingly, it remains a question of fact that can only be determined on a case-by-case basis as to whether a given location would be considered a place of business of a particular employer and/or a regular place of employment of a particular employee.

With regard to the use of the word "normally" in Question 2 of Form T2200, it is our view that this should be understood to refer to travel that is required to be undertaken commonly, under normal or ordinary conditions and with some degree of regularity.

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