| 921407 | |
| R.B. Day | |
| (613) 957-2136 |
Mr. Richard E. AndrewsSenior Project OfficerTreasury Board of Canada Secretariat L'Esplanade Laurier 140 O'Connor Street10th Floor, East TowerOttawa, OntarioK1A 0R5
July 22, 1992
Dear Mr. Andrews:
We are writing in reply to your letter of May 1, 1992, wherein you requested our opinion regarding the assessment of taxable benefits with respect to the personal use of government vehicles by government employees. In this regard you have set out five particular work situations that you suggest should be given special consideration.
Our Comments
The department's position regarding the computation of such benefits is set out in Interpretation Bulletin IT-63R3 (the bulletin), entitled "Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer", a copy of which is enclosed for your information.
The following comments regarding the computation of taxable benefits are cross-referenced to the bulletin where applicable:
1. The value of the benefit derived by an employee from the personal use, and availability of, an employer's automobile is to be included in computing the employee's income. This value is an amount equal to the portion of those operating costs paid by the employer which relate to the personal use by the employee plus a reasonable standby charge. (Paragraph 1.)
2. Personal use by an employee includes travel between the employee's work place and home along with other personal use activities such as vacation trips, shopping trips, etc. (Paragraph 5.)
3. The operating costs of the vehicle relate to those out-of-pocket costs the employee would be required to pay if the vehicle were owned by the employee and that are paid for by the employer. (Paragraph 6.)
4. A reasonable standby charge is generally two percent per month of the employer's cost of the vehicle, or 2/3 of the lease cost if the vehicle is leased, for the total available days that the vehicle is made available to the employee or a person related to the employee. A reduced standby charge may be computed where the personal use is less than 1,000 kilometres per month and other specific conditions are fulfilled. (Paragraphs 8 through 16.)
5. In determining the total available days a vehicle is made available to an employee, or a person related to the employee, once an employer-owned automobile is assigned to an employee for use, that automobile is considered to have been made available to the employee from the first day and each day thereafter until such time as the employee is required by the employer to return the vehicle and the control over its use to the employer or a person related to the employer. (Paragraph 15.)
With respect to 5 above we have taken the position that employees who are on call 24 hours per day and have a car available for their use at all times are required to compute taxable befits in the manner discussed in the bulletin. In other words their 24-hour "on call" status does not impact on the fact that employer-owned vehicles are available to these individuals at all times.
In view of the foregoing, it is our opinion that no exceptions can be made with respect of the computation of taxable benefits with respect to the five work situations set out in your letter.
We also advise that, the situation outlined in your letter with respect to Transport Canada test vehicles has been discussed directly with that Department and they have been made aware of our position.
We trust our comments will be of assistance to you.
Yours truly,
P.D. Fuocofor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
c.c. Bert StranbergSource DeductionsOttawa District OfficeFourth Floor
A. BissonnetteDirectorSource Deductions DivisionHead Office