I am a Canadian technician who has been hired by a British company to work on a project in the UK for them on a rotational basis for the next 2 years. I am working on a 28 day on / 28 day off schedule. At the end of my 28 day work period the company gives me an airline ticket to come back to Canada for my 28 days off and then to return again to the project in the UK. Wages are paid at a daily rate (I get a day's pay for each work day). My travel days are also considered by the company to be work days but I receive no pay for the days which I am at home. Is the CRA going to want me to pay income tax on the amount which the company spends on my tickets? In other words will they consider the travel cost to be a taxable "benefit"?
Nobody has been able to give me a definite answer. Not even the CRA! If anyone on the forum knows of a similar work situation I would surely be obliged for their input.
Travel taxes
Moderator: Mark T Serbinski CA CPA
I assume you are being taxed as an employee and not as a subcontractor. If you are a subcontractor then you would declare the portion you received as a technician into income and not teh portion related to the airline since it was not paid to you directly.
As an employee they may add this to your reportable income as a benefit but they may be able to exclude this amount as income on the basis that you were required as an employee to travel on business out of the municipality where you usually work ( ie UK) to come back to Canada and then return to the UK. The key here is how to determine that your trip back to Canada is business related. I have had cases where people on overseas assignements had an emplyment contract that stated the company shall reimburse all the employees travelling expenses either directly or indirectky(ie by paying them outright as in your case, but they would be connsidered a tax tree reimbursement)and the company requires the employee to travel back and forth from Canada as part of the employment conditions.
In this case since the company is merely reimbursing you for travel they require it will not be taxable as long as it is reasonable and not excessive.
As an employee they may add this to your reportable income as a benefit but they may be able to exclude this amount as income on the basis that you were required as an employee to travel on business out of the municipality where you usually work ( ie UK) to come back to Canada and then return to the UK. The key here is how to determine that your trip back to Canada is business related. I have had cases where people on overseas assignements had an emplyment contract that stated the company shall reimburse all the employees travelling expenses either directly or indirectky(ie by paying them outright as in your case, but they would be connsidered a tax tree reimbursement)and the company requires the employee to travel back and forth from Canada as part of the employment conditions.
In this case since the company is merely reimbursing you for travel they require it will not be taxable as long as it is reasonable and not excessive.
JG