1 May 1992 Income Tax Severed Letter 9206515 - Whether part-time employee is eligible for the 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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

SUBJECT: PART-TIME EMPLOYEE ELIGIBLE FOR OETC? (7984-1) SECTION: 122.3]

May 1,1992

Assessing & Accounting
Programs Section K. B. Harding
International Tax Programs

• W. G. Pembroke 920651 Overseas Employment Tax Credit

This is in reply to your memorandum of March 2, 1992 wherein you requested our opinion whether or not an individual in the following situation qualified to claim an Overseas Employment Tax Credit (OETC).

XXX

An individual may claim an OETC where he is resident in Canada in a taxation year and, throughout any period of more than 6 consecutive months that commenced before the end of the and year and included any part of the year, he was employed by a person who was a specified employer (subject to an exception which is not applicable in this case) and performed all or substantially all the duties of the individual's employment outside Canada in connection with a contract under which the specified employer carried on business outside Canada with respect to a qualified activity.

The six-month consecutive period would commence on the first day the individual performed his duties of employment outside Canada and would end with the last day he ceased to perform his duties of employment outside Canada. Where an individual is employed on a part-time basis on demand, for these purposes he would commence and cease his employment at the beginning and end of each period he performed duties outside Canada. Since such individuals do not continue to be employed, as are regular employees, during the time between each of their periods they are employed outside Canada, they would generally not meet the test that requires them to be employed for a period of 6 consecutive months which commenced in the year or a previous year. This would be the case with respect to the above taxpayer since the longest period for which he was employed during the taxation year was XXX.

In our view, any individual who is employed on a part-time basis on demand outside Canada would not be qualified to claim the OETC even where he works outside Canada in excess of 183 days in a taxation year unless one of the periods that commenced in the year or a previous year and ended in the particular year exceeded 6 consecutive months.

We trust this is adequate for your purposes.

for Director
Reorganizations and Foreign Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch