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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Questions and answers concerning the employment deduction for motor vehicle expenses incurred by a forestry worker and the review of our position.
Position: The motor vehicle expenses a forestry worker pays to travel between his home and a place where he regularly reports to work are non-deductible personal expenses. Under certain circumstances, the travelling of a forestry worker is not personal travelling and the motor vehicle expenses are deductible.
Reasons: General position applied to all employees in general.
MOTOR VEHICLE EXPENSES - FORESTRY WORKERS
Q.1 Why was the comment changed regarding the travel expenses of employees working in forestry operations in Chapter 4 of Guide T4044 - Employment Expenses?
The CCRA previously held the position that motor vehicle expenses incurred by a forestry worker were not deductible because they represented personal expenses. This travelling included travelling between home and the forest camp, between the forest camp and the cutting site, and between home and the cutting site.
The CCRA re-examined its position regarding the travel expenses of forestry workers. Considering the general position applied to all employees in general, the CCRA realized that, under certain circumstances, the travelling of forestry workers would not be personal travelling. As a result, the comment in Guide T4044 was changed.
Q.2 According to the general position applied to all employees, which travel expenses does the CCRA consider personal expenses?
The CCRA generally considers the expenses an employee pays to travel between his home and a place where he regularly reports for work as non-deductible personal expenses.
Whether an employee regularly reports for work at a given place is a question of fact.
Q.3 According to the general position applied to all employees, which other conditions must an employee comply with in order to be able to deduct motor vehicle expenses from his employment income?
The other conditions, which are stated in Chapter 3 of Guide T4044, are as follows:
? The employee is normally required to work away from the employer's place of business or in different places.
? Under the contract of employment, the employee has to pay his own motor vehicle expenses.
? The employee does not receive a non-taxable allowance for motor vehicle expenses.
? The employee keeps with his records a completed copy of Form T2200.
Interpretation Bulletin IT-522R contains further information.
Q.4 Does the CCRA consider a forest camp set up by an employer, where a forestry worker receives his instructions, prepares reports, eats, or sleeps, to be a place where an employee reports for work?
Yes. The forest camp set up by an employer is a place of business of the employer. In most cases, a forestry worker reports regularly to this forest camp. As a result, the expenses he pays to travel between his home and the forest camp are non-deductible personal expenses.
Q.5 May a cutting site be a place of business of the employer?
If a forestry worker reports regularly to this cutting site, it is considered a place of business of the employer for this forestry worker.
When the employer does not set up a forest camp and a forestry worker needs to travel between his home and the cutting site where he reports regularly, the expenses the forestry worker pays for this travelling are non-deductible personal expenses. However, if the travelling takes place between his home and a cutting site where the forestry worker does not report regularly, he may deduct the expenses incurred for this travelling if he meets the conditions set out for all employees in general, under the heading Allowable motor vehicle expenses (including capital cost allowance) in Chapter 3 of Guide T4044.
Whether a forestry worker reports regularly to a cutting site when he returns to the same cutting site for several weeks is a question of fact.
Q.6 Does the CCRA consider a forestry worker to "report regularly" to a specific cutting site if he goes to a different cutting site every week or every two weeks and does not return to the same cutting site for the remainder of the season?
In this type of situation, the CCRA would be willing to consider that this forestry worker does not report regularly to this specific cutting site and this cutting site does not represent a place of business of the employer for this forestry worker. In addition, the CCRA generally considers that this forestry worker is normally required to perform the duties of his employment outside the place of business of his employer or at different places.
Q.7 Are the motor vehicle expenses paid by a forestry worker to travel between a forest camp and a cutting site deductible?
In this situation, the CCRA generally considers that this forestry worker is normally required to perform the duties of his employment at different places. Furthermore, travelling between the forest camp and the cutting site is travelling in the course of the employment of the forestry worker. Therefore, the forestry worker may deduct the expenses he pays to travel between the forest camp and the cutting site if he meets the conditions listed for all employees in general, under the heading Allowable motor vehicle expenses (including capital cost allowance) in Chapter 3 of Guide T4044.
Q.8 Are the motor vehicle expenses paid by a forestry worker to travel between two or more cutting sites on the same day deductible?
The CCRA generally considers travelling between two or more cutting sites on the same day as travelling in the course of the employment of a forestry worker. Therefore, the forestry worker may deduct the expenses he pays to travel between these cutting sites if he meets the conditions listed for all employees in general, under the heading Allowable motor vehicle expenses (including capital cost allowance) in Chapter 3 of Guide T4044.
Q.9 If a forestry worker stops at the employer's office before continuing on to a cutting site (or the forest camp) where he reports regularly, will he be able to deduct the expenses incurred to travel from the office to this cutting site (or to the forest camp)?
According to the information we have on this particular industry, it is not necessary to stop at the office to receive instructions or perform employment-related duties. Forestry workers generally receive their instructions at the forest camp, by telephone, or by mobile radio. In this situation, the CCRA does not consider the expenses incurred to travel from the office to the cutting site (or forest camp) where a worker regularly reports as expenses for travelling in the course of the employment of the forestry worker; therefore, these expenses are not deductible.
Q.10 Does a forestry worker need to keep records and vouchers if he claims deductions for his motor vehicle expenses?
Yes. Motor vehicle expenses that are deductible should be supported by vouchers. Furthermore, it is important to keep a record providing the details on the travelling for which the deduction is claimed and clearly showing that the travelling is allowable.
Note
The masculine gender used in this document applies equally to males and females.
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