17 November 2008 External T.I. 2008-0288491E5 - Employer Provided Parking

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: Taxability of employer-provided parking.

Position: Question of fact but in this case it appears that there may be no benefit.

Reasons: The parking was required to perform the duties of employment on a regular basis.

XXXXXXXXXX 								2008-028849
									Michael Cooke
November 17, 2008

Dear XXXXXXXXXX :

Re: Employer Provided Parking

This is a response to your correspondence of July 28, 2008, concerning whether a reimbursement of an employee's parking expenses in the following scenario would result in a taxable benefit under the Income Tax Act (the "Act").

Specifically, you indicate that the employer requires its employees to use their own vehicles in performing the duties of employment. The employer currently provides free parking on a first-come, first-served basis at the employer's parking lot located at the main office. However, where an employee is required to perform the duties of employment away from the employer's main office, the employer will pay for any additional parking costs that are incurred by the employee in the performance of such duties. On occasion, these employees must return from a point of call to the office to complete paper work or to make work-related telephone calls. If the employer's parking lot is full, the employee will be reimbursed for the cost of parking at a public lot nearby.

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 an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Canada Revenue Agency ("CRA") Tax Services Office. While the determination of whether a parking benefit has been conferred on any particular employee remains a question of fact that must be determined on a case-by-case basis by the appropriate TSO, we are prepared to offer the following comments.

The general position of the CRA on employer-provided parking is outlined in Guide T4130, "Employers' Guide Taxable Benefits". As noted therein, employer-provided parking generally constitutes a taxable benefit to an employee under paragraph 6(1)(a) of the Act whether or not the employer owns the lot. The amount of the taxable benefit is based on the fair market value of the parking minus any payment the employee may make to use the parking space.

"Scramble parking" (i.e. where there are fewer parking spaces than there are employees who require parking and the parking spaces are available on a first-come, first-served basis) is an exception to this rule. Although a benefit is conferred, its value to any particular employee is difficult to determine. For this reason, the CRA has administratively decided not to require the reporting of such a benefit.

There is no taxable benefit, however, where parking is provided to an employee who is regularly required by the employer to use his or her own automobile (or an employer-provided automobile) in the performance of employment duties. As a general guideline, if an employee is required to use his or her automobile 3 or more days on a weekly basis for employment-related travel and requires a parking space for this purpose, the parking space would be considered to be used regularly for employment-related reasons. Therefore, in such circumstances the employee would not be in receipt of a taxable benefit.

We trust our comments will be of assistance.

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