30 August 2010 External T.I. 2010-0368611E5 - Personal versus employment travel

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: Are motor vehicle expenses incurred for travel between an employee's home and various non-employer-owned work locations deductible?

Position: It is a question of fact, but no if the work location is considered to be the employee's RPE.

Reasons: The CRA generally considers any location at or from which the employee regularly reports for work or performs the duties of employment, including a place where a contract is being carried out, as being a regular place of employment. In a multiple work location situation an employee can have more than one regular place of employment, or a regular place of employment can change from time to time because of the nature of the employment situation. Travel between the employee's home and a regular place of employment is considered to be personal travel.

XXXXXXXXXX 						2010-036861
							Michael Cooke, C.A.
August 30, 2010

Dear XXXXXXXXXX :

Re: Deduction of Motor Vehicle Expenses

This is in response to your letter of May 14, 2010, wherein you asked whether you could deduct motor vehicle expenses under paragraph 8(1)(h.1) of the Income Tax Act (the "Act") in the particular circumstances described in your letter.

We understand that in the performance of your employment duties of providing XXXXXXXXXX services for your employer on a casual basis you are required to travel to various work locations that are not owned or operated by your employer. On most occasions you travel directly from home to the particular work location; however, on some occasions you travel to your employer's place of business XXXXXXXXXX . In the last year you indicated that you have worked at approximately XXXXXXXXXX different locations in the XXXXXXXXXX area.

The situation outlined in your letter involves completed transactions involving specific taxpayers. As indicated in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002 ("IC 70-6R5"), where the transactions are completed and involve specific taxpayers normally all relevant facts and documentation should be submitted to the appropriate Tax Services Office ("TSO") for their consideration. Information Circular 70-6R5 and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca and a list of TSO's is available on the "Contact Us" page of the Canada Revenue Agency's ("CRA") website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.

A deduction for amounts expended by an employee in a year in respect of motor vehicle expenses incurred for travelling in the course of an office or employment is allowed under paragraph 8(1)(h.1) of the Act where, inter alia, the employee is:

(i) ordinarily required to carry on the duties of the office or employment away from the employer's place of business or in different places, and

(ii) required under the contract of employment to pay motor vehicle expenses incurred in the performance of the duties of the office or employment.

As indicated in paragraphs 14 and 49 of Interpretation Bulletin IT-522R, Vehicle, Travel and Sales Expenses of Employees, ("IT-522R") travel between an employee's home and the place where that employee regularly reports for work (whether on a part-time or full-time basis) is generally considered to be personal travel and not employment-related travel. Further, as indicated in paragraph 57 of IT-522R, the place where a contract is being carried out is generally regarded by the CRA 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 generally considered to be a place of employment.

Where an employee works at a particular location for an extended period of time such place will most likely be considered to be that employee's regular place of employment. On the other hand, even though an employee may change work locations on a frequent basis, since an employee may have more than one regular place of employment 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. It is the CRA's view that a particular work location may be considered as a regular place of employment even though the employee may only report to work at that particular location on a periodic basis (e.g., once or twice a month) during the year.

Consequently, the determination as to whether a particular location is considered to be a regular place of employment requires a review of all the relevant facts of the particular situation. However, based on our limited understanding of the facts in your situation, it is possible that one or more of your work locations might not be considered as a regular place of employment if, for example, you only work at a particular location once during the year or perhaps only for a few days in the year. We would also note that where an employee is required to travel directly from one work location to another work location, such travel is considered to be employment-related travel.

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. 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. However, we would expect an employer to issue a Form T2200 only where an employee has reasonable grounds to make such claims. Where the employer and employee have uncertainties that cannot be resolved by mutual agreement between both parties, as noted above, the parties should contact their local TSO for further assistance.

We trust the above general 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