1 October 1998 External T.I. 9819885 - SPECIAL WORK SITE - TEMPORARY DUTIES?

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: Whether an engagement beyond two years will be considered temporary for purposes of the tax-free allowance for a special work site.

Position: Generally, an engagement beyond two years will be regarded as long-term.

Reasons: Two years is considered to be a reasonable guideline for employment that purports to be a temporary assignment.

XXXXXXXXXX 	J. Gibbons
		5-981988
Attention:  XXXXXXXXXX 

October 1, 1998

Dear XXXXXXXXXX:

We are replying to your letter of July 10, 1998, in which you request our view of the meaning of the terms “temporary” and “principal place of residence,” in subparagraph 6(6)(a)(i) of the Income Tax Act.

Although you have asked for a technical interpretation, the situation presented appears to be an actual fact situation. Should this situation involve a proposed transaction, you may wish to submit all relevant facts and proposed transactions for a binding advance income tax ruling. However, should this situation involve actual taxpayers and completed transactions you may wish to submit all relevant facts and documentation (including company names and identification numbers) to the appropriate Tax Services Office for their comments. We are, however, prepared to provide some general comments.

You describe a situation where employees who are citizens of a foreign country will be engaged for a period of four years at a work site in Canada. You are of the opinion that this particular engagement should be regarded as temporary in nature because of the specific circumstances surrounding the engagement. You believe that our position in paragraphs 5 and 6 of Interpretation Bulletin IT-91R4, “Employment at Special Work Sites or Remote Work Locations,” which suggests that an engagement lasting more than two years would not be regarded as temporary, is inadequate in light of current business practices and should be changed. Our general position remains that duties will be considered to be of a temporary nature if, on the basis of the facts known at the commencement of the engagement, it can reasonably be expected that they will not provide continuous employment beyond a period of two years. The two years is considered to be a reasonable guideline for employment that purports to be a temporary assignment. A period of employment that extends beyond that takes on the characteristics of a long-term or permanent assignment, such that our position at the outset would be that subsection 6(6) does not have application. Accordingly, we have not considered your request further.

We trust that these comments will be of assistance.

Yours truly,

J.F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate

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