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:
During the course of most workings days, a sales representative visits customers. However, approximately once a week, the employee proceeds to his or her employer's premises to complete paperwork, receive instructions, etc. Is the employer's premises the employee's place of work?
Position TAKEN:
Yes
Reasons FOR POSITION TAKEN:
It is based on positions previously taken by this Directorate.
942032
XXXXXXXXXX M. Eisner
November 20, 1994
Dear Sir:
Re: Personal Use of Automobile
This is in reply to your letter of August 4, 1994 in which you asked for our comments on whether certain travel is of a personal nature for the purposes of determining taxable automobile benefits. We also acknowledge our telephone conversation on October 28 (Eisner/XXXXXXXXXX) in which the circumstances of your situation were clarified.
The circumstances outlined in your letter relate to an actual fact situation. In order to obtain the Department's position on the tax consequences thereof, you should contact the Source Deductions Division at your local District Taxation Office. We are, however, providing you with the following general comments.
For your general information, we note that the Department's position on the determination of a personal use benefit of a vehicle that does not fall into the definition of "automobile" in subsection 248(1) is discussed in paragraph 13 of Interpretation Bulletin IT-63R4 which has been enclosed (IT-63R3 has been superseded by IT-63R4). On the other hand, where the vehicle is an "automobile" as defined in subsection 248(1) of the Income Tax Act (the Act), the operating benefit is now determined under paragraph 6(1)(k) or (l) of the Act.
You are concerned with a type of situation involving sales representatives. Each sales representative is responsible for exposing the company product within a particular territory and will usually visit the premises of several customers during a work day. Since a sales representative, with the employer's permission, is not required to report to the employer's premises on a daily basis, a sales representative, during a work day, may proceed directly from his or her residence to various locations where they meet customers and then return to his or her residence from the location of the last customer. However, a sales representative reports to the employer's establishment every week or so for the purposes of completing paperwork and receiving instructions.
The concern with respect to the above situation is whether certain travel, in each of two instances, is of a personal nature. In the first instance, a sales representative may proceed directly to the employer's premises from his or her residence for the purposes of attending a meeting. In the second instance, a sales representative may travel to a customer's premises before proceeding to the employer's premises to obtain promotional material and then return to his or her residence.
With respect to the above type of situation, paragraph 5 of Interpretation Bulletin IT-63R4 states that "personal use includes travel between the employee's place of work and home". This paragraph also states that "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., effecting repairs at customers' premises), or returns home from such a point".
The context in which the word "regularly" is used in paragraph 5 is considered to be relevant to most situations. However, as the determination of an employee's workplace involves a question of fact, it may not cover all situations. An example of such a situation could be the one outlined above where a sales representative does not report to the employer's premises on a daily basis and most of his or her responsibilities require him or her to be at customer locations. Nonetheless, on the basis of the information set out above, it is still our view that the sales representative's place of work can be regarded as being the employer's premises. The basis of this view is that the determining factor is that the employer's premises is provided to a sales representative and the employee frequents the premises as indicated in the situation under consideration. We also wish to emphasize that it is not possible to provide more precise comments on the determination of an employee's place of work as a consequence of the nature of the issue.
On the basis that a sales representative's place of work for the purposes of paragraph 5 of IT-63R4 is the employer's premises, it is our view that, in the first instance described above, the travel from a sales representative's residence to the employer's premises would be personal in nature. Similarly, the travel in the second instance between the employer's premises and a sales representative's residence would be personal. Of course, the travel in the second instance from the employee's residence to the customer location and the travel from the customer location to the employer's premises would not be considered to be of a personal nature.
These comments represent our opinion of the law as it applies generally and as indicated in paragraph 21 of Information Circular 70-6R2 are not binding on the Department.
We trust that these comments will be of assistance to you.
Yours truly,
J.A. Szeszycki
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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