12 March 1985 Income Tax Severed Letter A-0920 - [Missionary 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.

March 12, 1985

XXX

C.D. Middleton (613) 995-2455

Dear Sir:

This is in reply to your letter, which we received on January 4, concerning your status for tax purposes while you are overseas on a three year missionary assignment.

If you are leaving Canada on a temporary basis with the intention of returning to Canada, you would be considered to be ordinarily resident of Canada provided that:

1. you file a Canadian income tax return for each year of absence and pay income tax on your world income;

2. you are a Canadian citizen or landed immigrant;

3. you are employed by a religious organization which is a resident of Canada; and

4. you are abroad on a non-permanent basis (generally five years or less).

If you satisfy the above conditions and you are required to pay income taxes to a foreign government in respect of your income earned there, you would be entitled to an appropriate foreign tax credit in respect of such foreign taxes in computing your Canadian taxes payable.

The foregoing is described in paragraph 12 of Information Circular 79-9 (copy enclosed).

The 1985 income tax returns will not be available until the end of the year. However, a 1985 return will automatically be sent to XXX Toronto address, if that address is specified as your "present address" when you file your 1984 tax return.

You may, of course, decide to sever your residential ties with Canada and establish residential ties elsewhere, in which case you may be regarded as a non-resident of Canada. We are enclosing Interpretation bulletin IT-22 lR2 which sets out criteria relevant to the determination of a person's residence status and IT-16 lR3 which provides comments on the tax treatment of Canadian employment income paid to non-residents who were previously resident in Canada. Furthermore, persons other than residents of Canada are liable to Part XIII withholding tax on their Canadian source investment, rental and pension income.

We hope the above comments will be of assistance to you.

Yours truly,

for Director Non-Corporate Rulings Division

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