7 December 1983 Income Tax Severed Letter A-9042 - [831207]

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.

XXXX

D. S. Delorey

December 7, 1983

Dear Sirs:

This is in reply to your letter of November 18, 1978 concerning a former resident of Canada who is employed in the U.S. with a Canadian Government Agency. You cite as facts the following:

1. The individual Taxpayer immigrated to the United States of America and ceased to be a resident of Canada within the meaning of Sec. 2(1) and Sec. 250(1) of the Income Tax Act.

2. The individual Taxpayer has retained Canadian citizenship, and has the appropriate working papers allowing employment in the United States of America.

3. Three years subsequent to becoming a resident of the United States, the individual Taxpayer became employed by a Canadian Government Agency.

4. Article VI(1)(b) of the Canada-United States Tax Convention exempts the individual taxpayer from tax in the United States.

3. The individual Taxpayer did not reside in Canada immediately prior to employment by the Canadian Government Agency.

6. The duties of employment are to be performed outside Canada.

On the assumption that the above comments reflect the facts, we agree that the deeming provisions of paragraph 250(1)(c) of the Income Tax Act do not apply. Accordingly, the individual is not taxable in Canada on his world income. However, by virtue of subsection 115(2) of the Act, he is taxable in Canada on the employment income if he is classified as a government employee or if the activities carried on by his employer outside Canada cannot be considered to be akin to commercial activities. In this regard, we refer you to paragraph 4 of Interpretation Bulletin IT-161R3 .

Yours truly,

for Director Non-Corporate Rulings Division

115(2) 250