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 airline employee was "sojourning" in Canada or only commuting.
Position: He was sojourning.
Reasons: In order to be considered commuting we would expect that for each visit an airline employee's stay in Canada would be limited to a day or two (in rare cases three days). In this case the individual was coming to Canada for work purposes in the case of each visit for more than three days at a time.
March 2, 2004
Richard Montroy Olli Laurikainen
Director, Policy and Business
Management Division
International Tax Directorate
344 Slater, 6th Floor
Attention: Ved Arora 2004-006124
Paragraph 250(1)(a) - Sojourning and Pilots
This is in response to your memorandum of February 9, 2004 wherein you request clarification of certain positions taken in reference to the above issue in our memorandum to your directorate dated July 9, 2001 (the "Earlier Memo").
You provide the following example:
1) Mr. X is a pilot.
2) Subject to the application of paragraph 250(1)(a) of the Act, Mr. X is not resident in Canada.
3) For the purpose of carrying out his duties of employment with an airline Mr. X leaves his country of residence and arrives in Canada sometime in December of 2001.
4) During the period January 1 through January 6, 2002 Mr. X is present in Canada. During this period only January 3 is a working day for Mr. X.
5) On January 7 Mr. X reports for work in Canada but leaves the country on an international flight returning January 10.
6) On January 11 Mr. X reports for work in Canada and departs on an international flight returning to Canada the same day.
7) During the period January 12 through January 15 Mr. X is present in Canada but does not work.
8) On January 16 Mr. X reports for work in Canada but departs on an international flight returning to Canada on the same day.
9) On January 17 Mr. X remains in Canada and does not report for work.
10) On January 18 Mr. X reports for work and departs Canada on an international flight returning to Canada on the same day.
11) On January 19 and 20 Mr. X remains in Canada and does not work.
12) On January 21 Mr. X. reports for work and departs Canada on an international flight returning to Canada on January 23.
13) On January 24 Mr. X reports for work but departs Canada on an international flight returning to Canada on the same day.
14) On January 25 Mr. X reports for work but remains in Canada throughout the day.
15) On January 26 Mr. X does not report for work but remains in Canada.
16) On January 27 Mr. X reports for work, departs Canada and returns to his country of residence.
17) Mr. X spends the period January 27 - 31 in his country of residence.
You quote the following passage in the Earlier Memo:
"However where the length of stay in Canada increases (i.e. beyond a maximum of two or three days), the visit should not be equated with that of a commuter. In our opinion, the person would in fact be sojourning in Canada. We suggest that the entire visit would be considered sojourning, notwithstanding that the visit may include a flight or other employment related duties." {the words in brackets added by us}
You request our view how the above position would be applied to the above scenario.
The Earlier Memo attempted to provide guidelines on how to distinguish whether airline personnel could be considered commuting during their stays in Canada in which case the days spent in Canada would not be considered "sojourning". As discussed in the Earlier Memo, in distinguishing a commuter from a sojourner relevance should be placed on in which country the individual spends his time away from work. To put it another way, a person that comes to Canada for work purposes may nevertheless be considered "sojourning" in Canada if he does not leave the country to spend his time away from work. In the unique circumstances of airline personnel, the Earlier Memo suggests that arrival in Canada a day or two in advance of a departing flight may be accepted as commuting in which case none of those days spent in Canada would be considered "sojourning".
Under the above set of facts, the above referenced quote from the Earlier Memo should, subject to the comments below, be interpreted as follows. Mr. X will have made three visits to Canada (i.e. December 2001 - January 7, 2002, January 10 - January 21, 2002 and January 23 - January 27, 2002) that in our view do not qualify as commuting because each of those visits included a period greater than 3 days in duration during which Mr. X either remains in Canada through out each day or leaves for only for a part of the day and, spends substantially all of his non-working time in Canada. Accordingly, every day, or part day, of each visit would qualify as a "sojourning" day for the purposes of paragraph 250(1)(a) of the Act. In our view, a visit would not be interrupted by an international flight departing Canada and returning the same day or by a particular working day spent entirely in Canada performing duties of employment on the ground. Such periods in our view qualify as "sojourning" and could not be considered commuting because all or substantially all of MR. X's time away from work is spent in Canada.
As indicated in the Earlier Memo, our comments are not intended to be hard and fast rules. If it were determined that Mr. X has certain accommodations available to him in a particular city in Canada where he spends the majority of his time away from work during the period commencing December 2001 and ending January 27, 2002, it is our view that this entire period of time can be viewed as a one visit notwithstanding that it includes two periods of no longer than a day or two in duration spent in places other than Canada. On the other hand if for example, Mr. X's stays in Canada were spent in different cities in Canada, such stays could more likely be viewed as separate visits. In this example however, the number of "sojourning" days in January 2002 would be the same whether it were concluded that there was only one visit or three since each visit under either conclusion would have been of sufficient duration to be viewed as "sojourning" rather than commuting. However, in another case where it were concluded that there were separate visits and a particular visit was only a day or two in duration, this latter interpretation may permit such short visit to be considered commuting rather than "sojourning".
You also request our view whether compensation is relevant to the determination of whether an individual is sojourning or commuting while he is in Canada. In our view it is not relevant. Accordingly, a pilot who comes to Canada for four consecutive days for which he is compensated by his employer should be considered sojourning notwithstanding that he is paid for those days if he spends his time away from work substantially all in Canada while a pilot who comes to Canada for up to two days before a flight may be considered commuting for those days even if he is not compensated for one of those days.
Yours truly,
for Director
International and Trusts Division
Income Tax Rulings Directorate
Policy and Planning Branch
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