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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether the use of an employer-provided automobile is personal in different situations such as travel between home and an airport; travel to competitor or another workplace of the employer on the way to work or home. What constitutes a regular workplace.
Position: Question of fact. Travel from home to regular workplace is personal. Primary purpose of trip must be considered for work related stop on way home or regular workplace.
Reasons: Consistent with other positions taken.
January 16, 2001
Toronto West Tax Services Office HEADQUARTERS
Shaukat Quadir Jacques E. Grisé
Employer Compliance Audit 957-2059
2000-005630
Personal Use of Employer-Provided Motor Vehicle
This is in reply to your memorandum of November 14, 2000, requesting our interpretation on a submission made by XXXXXXXXXX (the employer) in respect to the possible taxable benefits relating to employer-provided motor vehicles.
XXXXXXXXXX
The employer's head office is in XXXXXXXXXX where a number of employees with employer-provided motor vehicles report regularly. Other employees with employer-provided motor vehicles have an office located in one of the employer's stores or do not have an office at any store or head office but have a "home store" where they pick-up their mail. The employer's letter outlines several scenarios and asks for our interpretation on whether the use of the motor vehicle in each case would be considered personal.
The determination of whether or not a motor vehicle is used for employment-related purposes can only be made after considering all of the facts. Since the circumstances are likely to differ from one case to the next, no specific criteria or guidelines have been established in this regard.
The position on the benefits that must be attributed to employees who are provided with motor vehicles by their employers is set out in Interpretation Bulletin IT-63R5. Of particular interest for a discussion on personal use of a motor vehicle is paragraph 5 of that bulletin which states:
"5. In addition to what would obviously be considered use of a motor vehicle supplied by an employer that is not in connection with or in the course of the taxpayer's office or employment, (i.e., personal use e.g., vacation trips, personal shopping trips, etc.), such 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 (as required by the employer or with the employer's permission) the employee proceeds directly from home to a point of call other than the employer's place of business to which the employee reports regularly (e.g., to make repairs at customers' premises), or returns home from such a point. These particular trips are not considered to be of a personal nature. Also, where privately owned motor vehicles are prohibited from entering a restricted area where the employment duties are performed, and the distances to be travelled within the restricted area are such that a motor vehicle is necessary, the use and availability of the employer's motor vehicle within the restricted area is not considered to be for personal use. Employers and employees should keep records on the use of a motor vehicle so that the total kilometres driven in a calendar year by an employee or a person related to the employee may be properly apportioned between business use and personal use."
The expression "the employer's place of business to which the employee reports regularly" is not restricted to one particular place. It is the nature of some employment situations that more than one location may be viewed as a place to which the employee reports regularly. Accordingly, in our view, if an employee reports with some regularity to different locations of the employer, as would appear to be the case in some of the examples provided by the employer, it is likely that these different work locations can be considered as places to which the employee reports regularly. The fact that an employee has a location to which he or she reports to more frequently than the others does not affect the status of the other work locations as places to which the employee reports regularly. Thus, the travel by any particular employee between his or her home and any of these other regular work locations should likely be considered personal.
A trip to the employer's competitor would likely be considered employment related if it was undertaken at the direction of, or with the concurrence of the employer. However, in situations where travel includes both a personal element and an employment element such as where the employee stops at a competitor on the way to the place where the employee reports regularly from home or from that place to home, one must look at the primary purpose of the trip to determine if it is personal or employment related.
An employee's drive to and from an airport for a business trip would likely be considered employment related. Similarly, a drive to and from an airport to pick up or drop off a visitor would probably be considered employment related where the trip is undertaken at the direction of, or with the concurrence of the employer, and it is for business purpose.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at 613 957-0682. A copy will be sent to you for delivery to the client.
We hope our comments are helpful.
John Oulton, CA
Manager
Business and Individual Section
Business and Partnerships Division
Income Tax Rulings Directorate
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