12 October 1990 Internal T.I. 902367 F - Overseas Employment Tax Credit

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.

October 12, 1990

Dear Sir:

This is in reply to your letter of August 22 in which you requested our comments with respect to your eligibility for the "Overseas Employment Tax Credit" (OETC) for the 1989 taxation year. You have described the facts as follows;

24(1)

24(1)

In order to qualify for the OETC pursuant to section 122.3 of the Income Tax Act, an individual resident in Canada in a taxation year must be employed by a specified employer throughout any period of more than 6 consecutive months that commenced before the end of the year and that individual must perform all or substantially all of his employment duties in a country or countries outside of Canada in connection with a contract under which the specified employer carried on business in such a country.

24(1)  To meet the all of substantially all" criteria, the Department's position is that not less than 90% of your employment duties must be performed outside Canada. To qualify for the OETC it was necessary to work at least 82 days (91 x 90%) in Germany during the qualifying period. As you only worked 24(1) in Germany during this period, you would not qualify for the OETC.

From the information provided, it is also not clear whether your employer was carrying on business in Germany. Having a contract to perform services for a German corporation in Germany is not, in and by itself, indicative 24(1) was carrying on business in Germany. This can only be determined by a complete analysis of the facts of each case i.e.: whether the company has an office in the foreign jurisdiction, contract terms, employees in foreign jurisdiction, assets used abroad etc.

In conclusion, based on the information provided, it is our opinion that due to the fact that you did not meet the "all or substantially all" criteria required by section 122.3 of the Income Tax Act, you did not qualify for the OETC for the 1989 taxation year.

We trust that our comments will be of assistance to you.

for DirectorReorganizations an Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch