11 September 2006 External T.I. 2006-0175771E5 - Other Expenses for Work

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.

Principal Issues: Whether ambulance paramedics can deduct meals during work under 8(1)(g) and whether a deduction is available for vehicle expenses incurred in getting to and from work locations.

Position: 1) No; 2) General Comments.

Reasons: 1) Paragraph 8(1)(g) of the Act. 2) Question of fact.

XXXXXXXXXX 								2006-017577

September 11, 2006

Dear XXXXXXXXXX:

Re: Paragraph 8(1)(g) the Income Tax Act (the "Act") - Employed Paramedics

We are writing in response to your email correspondence of March 12, 2006 wherein you inquired whether paramedics who are employees can deduct the cost of meals and vehicle expenses incurred to travel between home and work locations on the basis that they are transport employees.

Our Comments

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to offer the following general comments.

Meals

Paragraph 8(1)(g) of the Income Tax Act (the "Act") only applies where, among other things, the individual makes disbursements for "meals and lodging" and is employed by a "person whose principal business was passenger, goods, or passenger and goods transport". In our view, paragraph 8(1)(g) of the Act does not apply in the situation you described because the provision requires a disbursement for both "meals and lodging", which generally means there is an overnight stay. In general, the provision does not apply in respect of paramedics because the principal activity of the employer is the transportation of persons requiring emergency medical attention; such an activity does not constitute the business of "passenger transport", which generally refers to the commercial transportation of passengers and the prevailing sense of the term "passenger" implies a public conveyance entered by fare or contract. Paragraph 8(1)(h) of the Act also permits employees to deduct travel expenses such as meals and lodging where:

i) the employee is ordinarily required to carry on the duties of employment away from the employer's place of business or in different places;

ii) the employee was required under the contract of employment to pay the travel expenses he or she incurred in the performance of the employment duties; and

iii) the employee was not in receipt of a non-taxable allowance for traveling expenses.

The deduction of the cost of meals under paragraph 8(1)(h) of the Act is also subject to the requirements in subsection 8(4), which provides that an employee can only deduct the cost of meals consumed during a period while he or she was required by his or her duties to be away for 12 hours or more from the municipality and the metropolitan area, if there is one, where the employer's establishment to which he or she regularly reported for work was located. Further, the employee must also obtain a completed Form T2200 - Declaration of Conditions of Employment, from the employer pursuant to subsection 8(10) of the Act. We do not have sufficient information to determine if in the situation you described the paramedics are away for 12 consecutive hours from the particular municipality or metropolitan area where their employer's establishment is located.

Vehicle Expenses

Employment related expenses for the purposes of section 8 of the Act does not include expenses in respect of travel between an employee's home and a regular place of employment. Generally, any location at or from which an employee regularly reports for work or performs the duties of employment, is considered a regular place of employment and as such, an employee could have more than one regular place of employment. We do not have sufficient information to determine if a particular base to where a paramedic may report would be regarded as his or her regular place of employment. A review of all of the circumstances surrounding travel to each such location would be required before a definite opinion could be expressed, and would depend on such factors as the frequency to which a particular location is visited.

We trust that our comments will be of assistance to you.

Yours truly,

Randy Hewlett
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch