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.
Western District Taxation Office Roundtable
Residence Status of Individuals
Question #21
The taxpayer, an employee of a Canadian company, accepts a position with an unrelated foreign employer. The position is anticipated to last three to five years. The employee's family moves with the employee to the foreign location and all ties with Canada, except with the Canadian employer, are severed.
The Canadian employer does not require the employee to resign to accept the foreign position. The Canadian employer will automatically provide a one-year leave of absence, without pay or benefits. Such leaves can be extended automatically for four more one-year periods. At the end of year five, the taxpayer must formally resign from the former Canadian employer.
Would Revenue Canada consider the taxpayer resident of Canada simply because the taxpayer is on a series of automatic one-year leaves of absence from the taxpayer's Canadian employer.
Department's Position
A determination of an individual's factual residence status, in all cases, is based on an analysis of all the facts. Where an individual has in fact severed all ties with Canada with the exception of a job to return to in Canada, he would be considered a non-resident of Canada. Where the individual has not severed all ties with Canada (eg. rented his house, put furniture in storage, maintained a Canadian bank account, etc.), these facts along with the job to return to in Canada may result in a determination of factual residence.
Jim Wilson
April 20, 1994
File #940993
Doc. Type "9"
Applicable Sections: Subsection 250(3)
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