The CRA refuses to offer assurance that travel allowances given to employees of accounting firms for their audit-related travel are exempt from taxes.

Is it necessary for employees of auditing firms to pay taxes on travel allowances they receive for traveling between their home and the audited premises during audit engagements that typically last for two weeks? The CRA referred to its previous statement in T4130, which defined a "regular place of employment" to include scenarios such as an employee reporting daily to a client's premises for a six-month project or attending biweekly meetings there. The CRA then provided a few general comments, including:

• If the client's place of business constitutes a "regular place of employment" for the auditor, then any travel between the auditor's residence and the client's place of business is considered personal travel and not part of the employee's job duties. Therefore, any allowances received by the auditor from the firm for this travel must be included in their income as per paragraph 6(1)(b).

The CRA did not outright declare that the allowances are definitely taxable, but this response was provided almost four years after the initial inquiry.

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