24 June 1991 Ministerial Letter 911038 F - Deemed Residents Who Establish Residential Ties in the Year

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.

SUBJECT: Deemed Residents Who Establish Residential  Ties in the Year

This is in response to your memorandum dated April 12, 1991 regarding the taxation of international students who have sojourned in Canada for more than 182 days in a particular taxation year and in the latter part of that taxation year become factually resident in Canada.

We provide the following general comments.

Whether an individual has established residency in Canada or is simply sojourning in Canada is a question of fact that can only be determined with full knowledge of all of the particulars of the situation.  In order for an individual to be sojourning in Canada at a particular time, that individual must also be factually resident outside of Canada at that time.

Where an individual sojourns in Canada for less than 183 days in a taxation year and then becomes factually resident in Canada for the remainder of the taxation year, the individual's taxable income will be determined pursuant to section 114.

Where an individual has sojourned in Canada for 183 days or more in a taxation year, paragraph 250(1)(a) will apply to deem that person to have been resident in Canada throughout that taxation year and thereby subject to tax in Canada on his world income for that year pursuant to subsection 2(2) (subject to treaty relief, if applicable).  Paragraph 250(1)(a) will override section 114 where paragraph 250(1)(a) otherwise applies and the individual becomes factually resident in Canada in that taxation year.

Treaty provisions regarding scholarship income, provided they are otherwise applicable, would apply until the time the person became factually resident in Canada.

The person's "income earned in a province" and thereby his provincial tax will be determined in accordance with Regulation 2600 and will be dependent, at least in part, on where the person is factually resident at the end of the taxation year.

We hope our comments are of assistance.

for DirectorReorganizations and Non-Resident Division Rulings Directorate Legislative and Intergovernmental  Affairs Branch