20 July 2009 External T.I. 2009-0315911E5 - Section 233.7

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 the expression "first became resident" as used in section 233.7 can include the situation where a former resident of Canada again becomes a resident of Canada in the year?

Position:

An individual who has already been a resident of Canada during a prior year, whether he was a factual resident of Canada or a deemed resident of Canada at that time, could not take advantage of the exception provided in section 233.7 when he again becomes a resident of Canada during a given year.

Reasons:

The intention of the legislator by writing the expression "first became resident" in section 233.7 is to grant an exemption from the requirement to file the information return required under sections 233.2, 233.3, 233.4 and 233.6 only in the case where an individual becomes a resident of Canada for the first time.

XXXXXXXXXX 							2009-031591
I. Landry, M. Fisc.
July 20, 2009

Dear XXXXXXXXXX :

Re: Exception to file an information return - section 233.7 of the Income Tax Act

This is in response to your email of March 31, 2009 in which you requested our comments regarding the expression "first became resident" as used in section 233.7 of the Income Tax Act (the "Act").

More specifically, you described the situation of an individual who was a resident of Canada from his childhood until the end of high school and then he departed from Canada to study in a foreign university. During the years he was living out of Canada, he was a resident of the foreign country and a non-resident of Canada. More than a decade later, he returned to Canada and became again a resident of Canada.

Unless otherwise stated, all statutory references in this letter are references to the provisions of the Act.

The situation outlined in your email relates to completed transactions involving a specific taxpayer. As explained in Information Circular 70-6R5, Advance Income Tax Rulings, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an advance income tax ruling. For situations involving completed transactions, all relevant facts and documentation should be submitted to the appropriate tax services office for their views. However, we are prepared to offer the following general comments, which may be of assistance.

In our view, the intention of the legislator by writing the expression "first became resident" in section 233.7 is to grant an exemption from the requirement to file the information return required under sections 233.2, 233.3, 233.4 and 233.6 only in the case where an individual becomes a resident of Canada for the first time.

Consequently, an individual who has already been a resident of Canada during a prior year, whether he was a factual resident of Canada or a deemed resident of Canada at that time, could not take advantage of the exception provided in section 233.7 when he again becomes a resident of Canada during a given year.

We trust these comments will be of assistance.

Yours truly,

Louise J. Roy, CGA
Manager
For Acting Director
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch