16 September 1998 External T.I. 9814065 - REMOTE WORK LOCATION

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:

For purposes of subsection 6(6) of the Income Tax Act, whether the community of XXXXXXXXXX , can be considered a remote work location for the teachers who work for the XXXXXXXXXX .

Position:

The teachers who work for the XXXXXXXXXX rent fully furnished apartments from their employer in XXXXXXXXXX and this accommodation meets the criteria of a “self-contained domestic establishment” as defined in subsection 248(1) of the Act. Therefore, there is a reasonable expectation that the teachers would establish and maintain a self-contained domestic establishment in XXXXXXXXXX . In order to qualify for the subsection 6(6) exclusion, there cannot be a reasonable expectation that the taxpayer would establish and maintain a self-contained domestic establishment.

Reasons: See 9432887 and IT-91R4.

XXXXXXXXXX 981406
G. Moore
September 16, 1998

Dear XXXXXXXXXX:

Re: Remote Work Location

I am replying to your letter of May 27, 1998, regarding whether XXXXXXXXXX, qualifies as a remote work location for purposes of subsection 6(6) of the Income Tax Act (the “Act”).

In your letter, you indicate XXXXXXXXXX is located in a prescribed zone. It is your view that XXXXXXXXXX should be recognized as a remote work location. You have indicated that

XXXXXXXXXX

I understand a departmental official, Ms Gwen Moore, telephoned you on August 28, 1998, to obtain additional information. During the telephone conversation, you indicated that teachers are brought in from other communities in August every year and they remain in XXXXXXXXXX until the end of the school year. On occasion, the teachers go to XXXXXXXXXX, the nearest established community with a population of over XXXXXXXXXX, for a weekend, via airplane. XXXXXXXXXX is approximately one hour by air from XXXXXXXXXX. The teachers pay for their own transportation and other costs if they go to XXXXXXXXXX for the weekend. As there is no other housing available, the employer, XXXXXXXXXX, provides furnished self-contained apartments for the teachers. The teachers pay rent for the apartments but the employer pays for other costs related to the apartment such as hydro. Each apartment is self-contained, furnished by the employer, and has a bathroom, kitchen and sleeping facilities. A teacher may have to share an apartment with another teacher.

Our Comments

Subsection 6(6) allows the value of, or an allowance received in respect of expenses incurred by an employee for, board and lodging, for a period at a remote work location to be excluded from employment income. For the remote work location exclusion to apply, the following requirements have to be met:

1) the employee must have worked at a remote work location at which, by virtue of its remoteness from any established community, the employee could not reasonably be expected to have established and maintained a self-contained domestic establishment; and

2) the period while the employee was required by the employee’s duties to be at the remote work location was at least 36 hours.

As mentioned above, the first test is whether an employee could reasonably be expected to establish and maintain a self-contained domestic establishment at the work location. Such a determination is made based on the facts of the particular case. A reasonable expectation is considered to exist where the employer provides a “self-contained domestic establishment” to the employee at the work location or the employee rents a “self-contained domestic establishment” at the work location. The term “self-contained domestic establishment” is defined in subsection 248(1) of the Act as a dwelling-house, apartment or other similar place of residence where a person generally sleeps and eats. A residence is considered to be a “self-contained domestic establishment” if it is a living unit with restricted access that contains a kitchen, bathroom and sleeping facilities. A room or rooms in a hotel, dormitory, boarding house or bunkhouse would not ordinarily be a “self-contained domestic establishment”.

Based on the information provided, it appears that the apartments rented to the teachers by their employer, XXXXXXXXXX, is accommodation that has all the necessary features of a “self-contained domestic establishment”. Therefore, for the teachers arriving in XXXXXXXXXX, there is a reasonable expectation of being able to establish and maintain a “self-contained domestic establishment”. Accordingly, the work location would not qualify as remote for the purposes of subsection 6(6) of the Act.

You had also asked for a clear definition of “remote work location” and “basic”. The Income Tax Act does not contain a definition of either of those terms for purposes of subsection 6(6) of the Act. However, we have enclosed a copy of Interpretation Bulletin IT-91R4, Employment at Special Work Sites or Remote Work Locations, which contains more information on this subject. In particular, paragraphs 12 to 17 of that bulletin discuss remote work locations.

You have enquired about remote work locations but not special work sites. We do not have sufficient information to determine if XXXXXXXXXX would qualify as a special work site. However, paragraphs 4 to 11 of the above-mentioned bulletin discuss special work sites.

In your letter, you mentioned that XXXXXXXXXX is in a prescribed zone. We can confirm that for purposes of the northern residents deduction in subsection 110.7(1), XXXXXXXXXX qualifies as a prescribed northern zone.

I trust my comments will be of assistance to you. Please note that these comments represent our opinion of the law as it applies generally and, as stated in Information Circular 70-6R3, are not binding on the Department.

Yours truly,

J. Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch