10 August 1995 External T.I. 9504125 - RESIDENCE DETERMINATION - LEAVE OF ABSENCE

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.

Principal Issues:

Effect of leave of absence on determination of residence

Position TAKEN:

not important; what is important is the ties with Canada

Reasons FOR POSITION TAKEN:

only job guarantee by itself does not determine residence

		950412
XXXXXXXXXX	S. Leung

Attention: XXXXXXXXXX

August 10, 1995

Dear Sirs:

Re: Residence Determination -- Leave of Absence

We are writing in response to your letter of February 7, 1995 in which you requested our comments on the effect of leave of absence on the determination of residence for Canadian income tax purposes.

As you know, whether or not an individual is a resident of Canada at a particular time for Canadian income tax purposes is always a question of fact. In determining residence of a particular individual, all the relevant facts and circumstances regarding that individual have to be reviewed and examined. The Department's general view concerning the determination of an individual's residency status for income tax purposes is expressed in Interpretation Bulletin IT-221R2, dated February 25, 1983. The following is our general views regarding the subject matter of your letter.

Provided that the individual severs all other ties with Canada, the fact that he or she may return to Canada after a period of leave of absence without pay to continue the job routine before the leave of absence does not, in and by itself, render that individual a resident of Canada for income tax purposes.

As to the question of whether the length of a leave of absence would affect the determination of residence, it is our view that the length of a leave of absence is not an important factor in determining residence. What is important is whether the individual has sufficient ties with Canada to be considered a resident of Canada.

Pursuant to the Public Service Employment Act and Regulations, an employee in the Public Service on leave of absence remains an employee of the Public Service during the period of absence. In such a case, it is our view that a federal public servant on leave remains a servant of Canada and, accordingly, such person will be deemed to be a resident of Canada throughout the taxation year pursuant to paragraph 250(1)(c) of the Act. If the legislation governing the employment of civil servants of a particular province is similar to the Public Service Employment Act and Regulations in that it specifies that an individual is still an employee of the province during the period of the leave of absence, he or she will continue to be a servant of that particular province regardless of whether the individual is or is not employed elsewhere during the leave of absence or whether the province continues to make contributions for him or her to the provincial government's pension plan.

If an individual needs the Department's assistance in determining residence, the individual may request Form NR73 from, complete and return it to, International Taxation Office, 2540 Lancaster Road, Ottawa, Ontario K1A 1A8 (telephone number: 1-800-267-5177 within Canada)

We trust that the above information will be of assistance to you.

Yours truly,

for Director
Reorganizations and Foreign Division
Income Tax Rulings
and Interpretations Directorate
Policy and Legislation Branch