22 February 1988 Income Tax Severed Letter

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.

Ms Margaret Catley-Carlson President Canadian International Development Agency Place du Centre 200 Promenade du Portage Hull, Québec K1A OG4

D.Y. Dalphy (613) 957-2122

February 22, 1988

Dear Ms Catley-Carlson:

We are writing to you in order to obtain information regarding programs of the Canadian International Development Agency ("CIDA") so that we may provide taxpayers who are employed overseas under a program that receives funding from CIDA with information about the income tax consequences of such employment.

Although persons who are not resident in Canada are generally taxable in Canada on only their Canadian-source income, the Income Tax Act (the "Act") deems certain persons to be resident in Canada (which results in taxation in Canada on their world-wide income). Paragraph 250(1)(d) of the Act provides:

"For the purposes of this Act, a person shall ... be deemed to have been resident in Canada throughout a taxation year if ... he performed services, at any time in the year, in a country other than Canada under a prescribed international development assistance program of the Government of Canada and he was resident in Canada at any time in the 3 months' period preceding the day on which such services commenced", and

Part XXXIV of the Income Tax Regulations provides:

"... each international development assistance program of the Canadian International Development Agency that is financed with funds (other than loan assistance funds) provided under External Affairs Vote 30a, Appropriation Act No. 3, 1977-78, or another vote providing for such financing, is hereby prescribed as an international development assistance program of the Government of Canada".

In order to decide whether a particular international development assistance program falls within the ambit of Part XXXIV of the Regulations and hence is a "prescribed international development assistance program of the Government of Canada", it is necessary to make the following two determinations:

1) Whether the program is an international development assistance program that is considered to be a "CIDA program" (e.g., it appears that certain programs receive grant assistance from CIDA for international development but may not be considered to be CIDA programs); and

2) Whether the program is financed with funds (other than loan assistance funds) provided under External Affairs Vote 30a, Appropriation Act No. 3, 1977-78, or another vote providing such financing.

Accordingly, would you kindly provide us with a comprehensive list of all programs that satisfy both of the aforementioned criteria (in particular, we require information in respect of programs of the Cooperative Union of Canada that may receive funds from CIDA). We would also appreciate receiving copies of the relevant votes as well as a copy of CIDA's internal guidelines that may be used in determining whether international development assistance programs that receive funding from CIDA are to be considered as CIDA programs.

We look forward to receiving the above-mentioned list and related information. Should you have any questions or wish to arrange a meeting between your staff and officials of this Directorate, please do not hesitate to contact Ms Denise Y. Dalphy at 957-2122.

Yours truly,

Director General Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch