Can an employer pay an allowance to an employee using the most favorable of the following three methods: the travel allowance set by the Treasury Board ($0.49 per km. of Quebec travel as of July 1, 2016); the Reg. 7306 rate of $0.54 per km for the first 5,000 km and $0.48 per km for the excess; and the employee’s actual out-of-pocket expenses? Do the same principles apply to an electric car? CRA responded:
[T]o establish that a per-kilometer rate is reasonable, the following could be taken into account: the type of vehicle, the road conditions, and the cost of gasoline or the electricity rate at the specific venue. …
Generally, the CRA considers a rate based on kilometerage to be reasonable if it corresponds to the rate prescribed under ITR section 7306…[provided the] employee pays all expenses related to the motor vehicle. However, a rate different from that prescribed may be considered reasonable in light of the particular facts of a situation. …
[T]he CRA does not have a specific policy on per-kilometre allowances for an electric motor vehicle.