Principal issues: Could the CRA give more general precisions on the interpretation of the expression « regular place of work »?
Position: The question of what is the employee « regular place of work » is a question of fact.
Reasons: In order for the subparagraphs 6(1)(b)(vii) and (vii.1) exceptions to apply, allowances must, inter alia, have been received from her/his employer for traveling « in the performance of the duties of the office or employment ». The question of whether the allowance was received from her/his employer for traveling « in the performance of the duties of the office or employment » or for « personal travel » is a question of fact which can only be answered after a review of all the facts of a particular situation. The Act does not define the meaning of the expression « in the performance of the duties of the office or employment » for the purposes of section 6. However, the CRA considers that personal travel means traveling from home to his/her « regular place of work ». Consequently, this travel is not considered as traveling « in the performance of the duties of the office or employment ». The expression « regular place of work » is not defined in the Act.
XXXXXXXXXX 2014-055194 Anne Dagenais, Advocate, M. Fisc., B.A.A. July 19, 2018
Dear Sir,
Subject: Qualification of employee travel
This is in response to your fax of October 14, 2014 and a telephone conversation (Gagnon/XXXXXXXXXX). You wish more information on the meaning of the term "regular place of employment".
You gave us an example of an employee who is an auditor at an accounting firm. This employee must travel to various of the firm's clients in a year for engagements of approximately one to two weeks per client. The employee receives an allowance from the firm for travel in the course of these engagements.
All legislative references herein are to the provisions of the Income Tax Act (the "Act").
Our Comments
This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.
Generally, any amount received by a taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose must be included in computing the taxpayer's income under 6(1)(b) unless it falls within one of the exceptions listed in subparagraphs 6(1)(b)(i) to (ix). In order for the exceptions in subparagraphs 6(1)(b)(vii) and (vii.1) to apply, the allowances must, inter alia, have been received from the employer to travel "in the performance of the duties of the employee’s office or employment".
The Act does not specify the meaning of the phrase "in the performance of the duties of the employee’s office or employment” for the purposes of section 6.
The question of whether an allowance has been received from the employer for traveling "in the performance of the duties of the employee’s office or employment" or for personal travel is a question of fact which can only be answered after having analyzed all the facts of a particular situation.
The CRA considers that personal travel includes travel between the employee's home and "regular place of employment". Consequently, such travel is not considered as travel "in the performance of the duties of the employee’s office or employment”. (footnote 1)
To determine an employee's "regular place of employment", we refer you to the Government of Canada webpage “When does a benefit arise (the personal use)”. Under the heading "Regular place of work" the following is stated:
“Determining whether a particular location is a regular place of employment is a question of fact that requires a review of all the relevant facts of each case. Generally, a regular place of employment is any location at which or from which the employee regularly (as a rule) reports for work. For example, if the employee has an office, it is that office; if the employee normally reports to a warehouse, it is that warehouse. The CRA may consider the regularity of the reporting and the nature of the duties when determining whether a location is a regular place of employment.”
Also, Employer Guide T4130 (footnote 3) under the heading "Regular place of employment" states, in part:
“A regular place of employment is any location where your employee regularly reports for work or performs the duties of employment. In this case, "regular" means there is some degree of frequency or repetition in the employee's reporting to that particular work location in a given pay period, month, or year. This "place" does not have to be an establishment of the employer.
A regular place of employment may include:
- the office where your employee reports daily
- several store locations that a manager visits monthly
- a client's premises when an employee reports there daily for a six month project
- a client's premises if the employee has to attend biweekly meetings there
Depending on the circumstances, your employee may have more than one location where they regularly report for work. If your employee has multiple regular work locations and travels between home and several work locations during the day, only the trip from your employee's home to the first work location or, the trip from the last work location to home is personal driving. Any travel by the employee between work locations is business related.”
The question of whether an auditor’s travel between the auditor’s residence and the place of business of a client of the firm is considered "in the performance of the duties of the employee’s office or employment" is a question of fact.
If the place of business of a client of the firm constitutes a "regular place of employment" for the auditor, the travel between the auditor’s residence and the place of business of that client is considered personal travel and is therefore not considered travel "in the performance of the duties of the employee’s office or employment". Consequently, the allowance received from the firm by the auditor in the year for this travel must be included in the auditor’s income by virtue of paragraph 6(1)(b).
Furthermore, other than these general comments, the CRA does not have specific criteria for determining whether an employee's travel is "in the performance of the duties of the employee’s office or employment".
We hope that our comments will be of assistance.
Best regards,
Michel Lambert, CPA, CA, M. Fisc.
Manager
Employment Income Section
Business and Employment Income Division
Income Tax Rulings Directorate
Legislative Policy and
Regulatory Affairs Branch
FOOTNOTES
Due to our system requirements, footnotes contained in the original document are reproduced below:
1. Government of Canada, When does a benefit arise (the personal use) (https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/automobile/when-does-a-benefit-arise-personal-use.html
2 Id.
3 CANADA REVENUE AGENCY, T4130 Employers' Guide - Taxable Benefits and Allowances, 2017, Chapter 2, under “Regular place of work”.