2 June 1980 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.

June 2, 1980

MONTREAL DISTRICT TAXATION OFFICE

HEAD OFFICE Non-Corporate Rulings Division J.E. Grise

Mr. J.L. Labelle Payroll Audit Section

Employment outside Canada

This is in reply to your memorandum of May 20 concerning various questions you have raised on employees outside Canada. We will respond in the same order as your queries.

1 - Revision of Bulletin IT-221

We are enclosing Interpretation Bulletin IT-221R dated May 26, 1980. You will note that paragraph 4 of the revised bulletin effectively eliminates the situation set out in your example.

2 - Income Tax Tables 380 & 380A

We agree that deductions must be determined from Table 380 (or 380A) in the case of an employee who reports for work at an establishment of the employer outside Canada. Tables 370 to 379, on the other hand, may be the appropriate Tables to use in the event of an employee who is not required to report for work at any establishment of the employer. In this respect see paragraph 100(4)(a) of the Income Tax Regulations.

3 - Employees of sub-contractors working outside Canada

We agree that the employees of a sub-contractor who perform services in a country other than Canada under a proscribed international development assistance program of the Government of Canada and who were resident in Canada at any time in the 3 months' period preceding the day on which such services commenced will be deemed to have been resident in Canada by virtue of paragraph 230(1)(d) of the Income Tax Act. Similarly, so will the employees of the main contractor who were resident in Canada at any time in the period described in the above-mentioned paragraph of the Act.

4 - Employees transferred from one project to another outside Canada

As outlined in 3 above, a person must have been a resident in Canada at any time in the 3 months' period preceding the commencement of services for paragraph 250(1)(d) to apply. A person who is a resident in Canada, although not physically present in Canada by reason of being employed outside of Canada, would meet the above requirement. Accordingly, they should not be granted the non-resident status.

for Director Non-Corporate Rulings Division

Encl.

250(1)(d) 2