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: What is the distinction between the words "travelling" and "temporary residing" as those terms are used in paragraph 33 of IT-75R4?
Position: Question of Fact.
Reasons: IT-75R4 and meaning of sojourning.
XXXXXXXXXX 2004-008386
Shaun Harkin, CMA
November 24, 2004
Dear XXXXXXXXXX:
Re: Technical Interpretation Request: Scholarships, Fellowships, Bursaries, Prizes, Research Grants and Financial Assistance
We are writing in reply to your email of July 5, 2004, wherein you asked our views on the distinction between the words "travelling" and "temporary residing" as those terms are used in paragraph 33 of IT-75R4, Scholarships, Fellowships, Bursaries, Prizes, Research Grants and Financial Assistance. Specifically you ask:
1) What type of accommodation is considered pertaining to travelling versus temporarily residing? In some countries distinction is made between over 6-month long lets and short-term lets, the rent for the short-term ones being considerably higher than the 6-month and over ones. Does this distinction count in determining whether the taxpayer has travelled or temporarily resided?
2) What is the maximum length of stay considered to pertain to travelling versus temporarily residing?
3) How does the existence of a permanent home in Canada and the location of the taxpayer's family at that location (i.e. family not accompanying the taxpayer during his/her research work in another country) affect the distinction between travelling and temporarily residing?
As you note, the issue of whether a taxpayer, while engaged in research work, may be considered to be temporarily residing in a place (sojourning) rather than travelling is a question of fact in each case that depends on factors such as the type of accommodation, the length of stay, the existence of a permanent home elsewhere and the location of the taxpayer's family. All the factors must be analyzed together and it is not possible to provide specific criteria pertaining to one factor alone in order to distinguish between travelling and temporarily residing.
With respect to the specific questions posed above, we offer the following comments:
1) No particular type of accommodation would, on its own, be a determining factor but, together with other facts, the nature of the accommodations may support a particular conclusion. For example, relatively short term stays in a regular hotel room would normally be consistent with travelling, whereas the rental of an apartment on a monthly basis would tend to indicate that the person was temporarily residing in the location.
2) There is no maximum length of stay that would distinguish between travelling and temporarily residing. Again the length of the stay must be considered together with the other relevant factors in order to reach a definitive conclusion. Of course, the longer the stay, the greater chance a researcher would be considered to be sojourning.
3) The fact that a taxpayer, conducting research out of the country, continues to maintain a permanent home in Canada and the taxpayer's family remains at that home would enhance the legitimacy of a taxpayer's claim to be considered travelling. However, this fact, in and of itself, would not be determinative.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency. Our practice is to make this specific disclaimer in all instances in which we provide an opinion.
We trust our comments will be of some assistance.
Yours truly,
Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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