Subsection 115(1) - Non-resident’s taxable income in Canada
Paragraph 115(1)(a)
Subparagraph 115(1)(a)(i)
Cases
Hurd v. The Queen, 81 DTC 5140, [1981] CTC 209 (FCA)
The employment income referred to in s. 115(1)(a)(i) includes stock option benefits that are deemed by s. 7 to have been received by an employee...
See Also
Martin v. The King, 2024 TCC 153
The taxpayers (two baseball players), who performed 40% of their duties in Canada rather than the US, agreed with the Toronto Blue Jays (the...
Blank v. Commissioner of Taxation, [2015] FCAFC 154, aff'd [2016] HCA 42
The taxpayer was employed by Glencore International AG (“GI”) or a subsidiary from November 1991 to December 2006, with his employment in...
Mullen v. The Queen, 2012 DTC 1154 [at at 3358], 2012 TCC 139 (Informal Procedure)
The taxpayer's exercise of stock options while he was resident in China gave rise to taxable income in Canada because he had received those stock...
Price v. Canada, 2013 DTC 5024 [at at 5615], 2012 FCA 332, aff'g 2011 DTC 1334 [at 1879], 2011 TCC 449
The taxpayer was a Barbados-resident Canadian citizen who worked as a pilot for Air Canada. His pay was based predominantly on flight time. He...
Sutcliffe v. The Queen, 2006 DTC 2076, 2005 TCC 812
The taxpayer was a U.S. resident who was employed by Air Canada as a pilot on domestic flights (between Toronto and other Canadian cities) and...
Austin v. The Queen, 2003 DTC 2181, 2004 TCC 6
A non-resident Canadian Football League football player was entitled to have the portion of his employment income that was not subject to Canadian...
Varnam v. Deeble, [1985] BTC 150 (C.A.)
In determining the level of employment income "attributable to duties performed outside the United Kingdom", reference should be had to the amount...
Administrative Policy
16 April 2024 Internal T.I. 2023-0964831I7 - Guaranteed payments to non-resident athletes
A resident of the US, who had entered into a 6-year employment contract (covering years 20X1 to 20X6) with a Canadian team, suffered a serious...
17 December 2018 Internal T.I. 2016-0659031I7 F - Attendance of board of directors meeting by phone
Regarding non-resident directors who participate outside Canada and by telephone at board meetings of a resident corporation held in Canada, the...
20 January 2021 Internal T.I. 2019-0832211I7 - Cross-border Restricted Share Units
The following approach (which is generally informed by that in the OECD Commentary to allocating cross-border stock option benefits) is followed...
21 February 2018 External T.I. 2017-0702061E5 - RCA contributions and taxable inc earned in Canada
A Canadian professional sports team has established an RCA for the benefit of an athlete employee under which each required employer contribution...
16 June 2014 External T.I. 2013-0515431E5 - International traffic and airline enterprise
During peak season, Canco, which transports passengers to destinations inside and outside Canada, is supplied planes and non-resident pilots and...
S5-F2-C1 - Foreign Tax Credit
The geographic source of employment is generally the physical place where the individual performs the related duties. Where this references more...
10 December 2012 External T.I. 2011-0429721E5 F - OETC - Employee stock options benefits
A resident employee, who exercises employee stock options a few years after their grant by the corporate employer, performed duties both in Canada...
25 September 2012 B.C. CTF Roundtable, 2012-0459411C6 - Allocation of cross-border employee stock options
Formerly, CRA generally had presumed for purposes of applying the domestic provisions of the Act (s. 115(1)(a)(i)) that an employee stock option...
6 July 2012 Internal T.I. 2012-0440741I7 - stock option benefit derived by US resident
USCo, which is a qualifying person for purposes of the Canada-US Income Tax Convention and is a wholly-owned subsidiary of a Canadian public...
7 May 2009 External T.I. 2008-0276181E5 - Stock Option Benefits
a US-resident individual who is a director of a Canadian public corporation, who receives retainer fees in excess of $10,000 annually and who is...
4 December 2003 External T.I. 2001-01177
Where rights under a share appreciation rights plan are granted while an employee is resident in Canada, but redeemed when the employee is a...
27 August 2003 Internal T.I. 2003-0019857 F - Attribution de dividendes par un RPEB
An employee profit sharing plan (EPSP) received dividends from taxable Canadian corporations that were included in computing its income and that...
28 January 2003 External T.I. 2002-0147405 F - Crédit d'impôt pour emploi à l'étranger
CCRA indicated that leave periods in Canada of employees engaged (when working) on a U.S. services contract did not stop the period of 6 months’...
19 January 2001 External T.I. 2000-0058405 - STOCK OPTIONS AND NON-RESIDENT
"Generally, the stock option benefit relating to the options granted to an individual while he or she is employed by a foreign employer while the...
28 May 1996 External T.I. 9601625 - INCOME OF NR, ACTORS AND ATHLETES
"Where the duties of a particular office or employment are performed partly in Canada and partly outside of Canada, a reasonable apportionment of...
30 November 1995 Ruling 9626393 - XXXXXXXXXX, PHANTOM STOCK PLAN
RC declined to rule that a non-resident director's fees could be allocated to Canada only to the extent of the number of days worked in Canada...
2 December 1993 Income Tax Severed Letter 933330A F - Non-Resident Exercises Stock Option (4093-U5-100-15)
Where a U.S.-resident was employed for several years by a wholly-owned Canadian subsidiary of a U.S. public company and in the course of his...
13 June 1991 T.I. (Tax Window, No. 4, p. 28, ¶1299)
Disability payments received by a U.S. resident under a disability policy maintained by his former employer will be subject to Canadian tax if the...
12 September 1990 T.I. (Tax Window, Prelim. No. 1, p. 18, ¶1015)
A non-resident director of a Canadian corporation who exercises his stock option is taxable under s. 7(1) to the extent that the granting of the...
81 C.R. - Q.56
The territorial source of employment income is the place where the related duties are normally performed.
IT-420R3 "Non-Residents - Income Earned in Canada"
IT-168R3 "Athletes and Players Employed by Football, Hockey and Similar Clubs" under "Non-Residents"
Articles
Tobias, "Taxing Benefits Realized by Former Canadian Residents", Taxation of Executive Compensation and Retirement, March 1994, p. 889
The author argues that Canada has no right to tax the benefit resulting from the exercise or realization of employee stock options on shares of...
Finley, "Non-Resident Directors' Fees May Be Subject to Withholding in Canada", Taxation of Executive Compensation and Retirement, October 1990, p. 348
RC has acknowledged that where a non-resident director participates in a meeting held by teleconference call, his fees are not income from duties...
Subparagraph 115(1)(a)(ii)
Cases
Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 575
In order to minimize Alberta corporate tax, the Precision group of companies reorganized, as a result of which:
- Interest-bearing debts were...
See Also
Commissioner of Taxation v Resource Capital Fund IV LP Commissioner of Taxation v Resource Capital Fund IV LP, [2019] FCAFC 51
Two Caymans investment LPs, whose limited partners were mostly U.S. residents, realized income-account gains from the disposal, pursuant to an...
Resource Capital Fund IV LP v Commissioner of Taxation, [2018] FCA 41 (Federal Court of Australia), rev'd on various grounds [2019] FCAFC 51
Two Caymans investment LPs (“RCF IV” and RCF V”) whose limited partners were mostly U.S. residents, realized gains from the disposal of...
Maya Forestales S.A. c. La Reine, 2005 DTC 514, 2005 TCC 66, aff'd 2008 DTC 6100, 2006 FCA 35
The taxpayer was found to be carrying on business in Canada on the basis that through a Canadian mandatory it offered for sale, in Canada, Costa...
Commissioner of Inland Revenue v. Kwong Myle Services Ltd. (2004), 7 ITLR 239 (HK CFA)
The taxpayer (a company incorporated in Hong Kong) underwrote the sale of apartment units in a building erected in mainland China pursuant to an...
Twentieth Century Fox Film Corp. v. The Queen, 85 DTC 5513, [1985] 2 CTC 328 (FCTD)
Before finding that film revenues of the U.S. taxpayer were reasonably attributable to its Canadian distributorship business notwithstanding they...
Yates v. GCA International Ltd., [1991] BTC 107 (Ch. D.)
In accepting a finding of the Commissioners that the income earned by a U.K. petroleum consulting firm from work done pursuant to a contract with...
CIR v. Hang Seng Bank Ltd., [1990] BTC 482 (PC)
The gains realized by a Hong Kong bank from the purchase and resale outside Hong Kong of certificates of deposit, bonds and gilt-edged securities...
Furness Withy & Co. Ltd. v. MNR, 66 DTC 5358, [1966] CTC 482 (Ex Ct), aff'd 68 DTC 5033, [1968] CTC 35, [1968] S.C.R. 221
The Canadian branch office of the taxpayer, which was a U.K.-resident company earning profits from international shipping conducted by itself and...
United Geophysical Co. of Canada v. MNR, 61 DTC 1099, [1961] CTC 134 (Ex Ct)
The U.S. parent of the taxpayer rented equipment to the taxpayer for use by the taxpayer in its Canadian operations. Although the U.S. parent was...
Commissioner for Inland Revenue v. Nell (1961), 3 S.A. 774 (A.D.)
The taxpayer, who was a consulting electrical and mechanical engineer practising in Johannesburg, visited project sites in Rhodesia for the...
International Harvester Co. of Canada, Ltd. v. Provincial Tax Commission, [1949] A.C. 36 (PC)
The taxpayer, which was an Ontario corporation engaged in the business of manufacturing and selling agricultural implements, carried on its...
Federal Commissioner of Taxation v. United Aircraft Corp. (1943), 7 A.T.D. 318 (HC)
An American manufacturer of airplanes purported to license its rights to use Australian patents and registered designs to an Australian company in...
Watson v. Commissioner of Taxation (W.A.) (1930), 1 A.T.D. 61 (HC)
The taxpayer, while practising as a public accountant in Western Australia, agreed with the client that if the taxpayer were able to secure a...
Administrative Policy
2021 Ruling 2019-0800191R3 - Carrying on business in Canada.
CRA ruled that the provision of various services by Canco to its immediate foreign parent and to other non-resident members of the group would not...
17 May 2023 IFA Roundtable Q. 5, 2023-0965771C6 - Remote Work Arrangements
50 of the 1,000 employees of USco (a US C-Corp and a “qualifying person” for purposes of the Canada-US Treaty) are Canadian residents who are...
7 June 2017 CPTS Roundtable, 2017-0695131C6
What positions has CRA taken regarding when specific oil and gas production activities form part of the same business for s. 111(5) purposes and...
19 June 2015 External T.I. 2013-0475751E5 - Withholding Tax on Royalty Payments
In response to what CRA treated as a general inquiry, it referenced the question of whether the non-resident company (which received royalties...
5 February 2014 External T.I. 2012-0466671E5 - Non-resident source withholdings
Canco will pay a fee to an India partnership providing technical support based on a percentage of the total technical support fee revenues to be...
S5-F2-C1 - Foreign Tax Credit
1.53 While a determination of the place where a particular business (or a part of the business) is carried on (that is, the location of the...
3 November 2008 External T.I. 2008-0278431E5 F - Déménagement hors Canada du siège soc. de société
In the context of a general discussion of consequences where there was an acquisition of control of a corporation incorporated in Canada in 2005...
11 January 2001 Internal T.I. 2000-0001017 - Sourcing of income & foreign tax credit
The Directorate agreed that the taxpayer, which was a Canadian manufacturer transferring some of its goods to a Japanese branch for sale there,...
2005 Ruling 2004-0094821R3 - Carrying on Business in Canada
Ruling given that the expansion of services provided by a Canadian corporation ("Canco") to its affiliated non-resident administrator of...
2004 Ruling 2004-0082661R3 - Carrying on Business in Canada
Ruling that the delegation by a non-resident service provider ("C Limited") to a non-resident investment fund (the "Fund") of accounting and...
19 April 2000 External T.I. 1999-001100
Interest on money borrowed by a non-resident individual to make a capital contribution to a partnership that carries on business in Canada through...
1999 Ruling 9920603 - NON-RESIDENT - CARRYING ON BUSINESS IN CDA
Ruling that a Canadian company engaged by a non-resident fund manager to provide accounting and clerical services in Canada would not thereby...
30 November 1996 Ruling 9704923 - CARRYING ON BUSINESS IN CANADA - ADM. SERVICES
Where a non-resident corporation has contracted to perform certain administrative duties for other non-resident corporations, the fact that it has...
1 December 1992 Memorandum (Tax Window, No. 27, p. 11, ¶2352; October 1993 Access Letter, p. 475)
Where a non-treaty country subsidiary of a Canadian corporation manufactures or process goods outside Canada with no purchasing or processing of...
8 July 1992 T.I. 921814 (March 1993 Access Letter, p. 87, ¶C248-129)
Discussion of allocation of business income between Canada and a foreign country where: a Canadian corporation, acting as a wholesaler, buys...
IT-420R2 "Non-Residents - Income Earned in Canada", para. 10
Income from property earned in Canada by a non-resident is not subject to tax under s. 115(1) but, rather, may be subject to Part XIII tax.
Articles
Nathan Boidman, "How Will Revised Sourcing Rules Affect Sales of U.S.-Made Goods Abroad?", Tax Notes International, 10 February 2020, p. 655
Computing Pt I tax on Canadian distribution profits of a U.S. producer (p. 657)
Section 4(1)(b) of the ITA provides that when a business is...
Jinyan Li, "Rethinking Canada's Source Rules In The Age Of Electronic Commerce: Part I", 1999 Canadian Tax Journal, Vol. 47, No. 5, p. 1077.
Constantine Kyres, "Carrying on Business in Canada", 1995 Canadian Tax Journal, Vol. 45, No. 5, p. 1629.
Broadhurst, "Financing by Non-Residents", 1992 Corporate Management Tax Conference Report, pp. 9:10 -9:18
Discussion of whether a non-resident purchaser of accounts receivable would be considered to be carrying on business in Canada.
Subparagraph 115(1)(a)(iii.1)
Administrative Policy
23 January 2015 External T.I. 2013-0509771E5 - Oil & gas payments made to U.S. resident
Mr. A, a U.S. resident, grants the right to drill for or take the oil & gas from his Canadian freehold property to a Canadian company, in...
Subparagraph 115(1)(a)(iii.2)
Administrative Policy
27 February 1991 T.I. (Tax Window, No. 1, p. 10, ¶1167)
If an individual ceases to be a resident of Canada and subsequently disposes of depreciable properties used in a business carried on outside...
Paragraph 115(1)(d)
Paragraph 115(1)(e)
See Also
Matlas, S.A. v. The Queen, 94 DTC 1591 (TCC)
Archambault TCJ. found that losses of the non-resident corporate taxpayer from the operation of a condominium (being its sole investment) were...
Administrative Policy
10 March 1995 Internal T.I. 9501456 - 115(1)(E) (HAA 6815-4)
"An individual who, while a resident of Canada, incurred a non-capital loss from a business carried on in Canada can, assuming the other...
Paragraph 115(1)(f)
See Also
Delancy v. The Queen, 2004 DTC 2907, 2004 TCC 465 (Informal Procedure)
The taxpayer, who was a U.S. resident, and was employed by two Canadian professional football teams, was unable to deduct his living expenses...
Matlas, S.A. v. The Queen, 94 DTC 1591 (TCC)
Archambault TCJ. found that the other deductions referred to in s. 115(1)(f) were deductions other than those referred in paragraphs 115(1)(d) and...
Subparagraph 115(1)(b)(ii)
See Also
Pampered Chef, Canada Corp. v. CBSA, [2008] ETC 4514 (CITT)
Individual self-employed sales representatives of the taxpayer secured orders for sales of kitchen products shown at various home parties by them...
Subsection 115(2) - Idem [Non-resident’s taxable income in Canada]
Paragraph 115(2)(c)
Cases
Jarlan v. The Queen, 84 DTC 6452, [1984] CTC 375 (FCTD)
Awards which a French resident received for an invention he had made over 10 years previously while still in the employ of the National Research...
Administrative Policy
26 September 2014 External T.I. 2014-0531441E5 - Unfunded LTD plan payment to non-resident employee
A Canadian resident employee, after qualifying for benefits under the unfunded long term disability plan ("LTD Plan") of the Canadian resident...
14 November 2007 External T.I. 2007-0245631E5 F - Retenue à la source -employé à l'étranger
A French national was employed by a Canadian corporation since August 1998 and resided in Canada from that date until July 29, 2007, when he...
31 October 1995 External T.I. 9507485 - EMPLOYEES AT CANADIAN EMBASSY IN SAUDI ARABIA (8019-6)
Former Canadian residents working at the Canadian Embassy in Riyadh will have their remuneration subject to tax under s. 115(2) since such...
Paragraph 115(2)(c.1)
See Also
Nonis v. The Queen, 2021 TCC 31
The taxpayer, Mr. Nonis, who was a U.S. resident , had been employed as the general manager of the Toronto Maple Leafs pursuant to an employment...
Paragraph 115(2)(e)
Subparagraph 115(2)(e)(i)
Cases
Hale v. The Queen, 90 DTC 6481, [1990] 2 CTC 247 (FCTD), aff'd 92 DTC 6473 (FCA)
The taxpayer, while a non-resident of Canada, received $25,000 for the performance of his duties as director of a Canadian company. Although the...
Hurd v. The Queen, 81 DTC 5140, [1981] CTC 209 (FCA)
"Remuneration" does not include a S.7 stock option benefit.
Administrative Policy
20 March 2015 External T.I. 2014-0534301E5 - Canadian Withholding Tax on Retiring Allowance
A lump sum payment in compensation for a loss of employment at a French subsidiary is made by Canco to a non-resident of Canada who had been...
Subparagraph 115(2)(b)(ii)
Administrative Policy
14 December 1995 External T.I. 9529255 - INTERNATIONAL SHIPPING-GAIN FROM DISPOSITION OF GOODWILL
Goodwill would be considered personal property for purposes of the exemption in s. 115(2)(b)(ii)(B).
Subsection 115(2.1)
Administrative Policy
27 July 2016 External T.I. 2015-0603271E5 - Subsection 216.1(1) and permanent establishment
A U.S.-resident actor provides Canadian acting services through an LLC or S corp. The 23% withholding tax under ITA s. 212(5.1) on the gross...
Subsection 115(3)
Administrative Policy
7 September 2016 External T.I. 2014-0559751E5 - Subsection 115(3)
Would Art. XV of the Canada-U.S. Treaty prevail over s. 115(3) where the Treaty provides more advantageous tax results for a U.S.-resident pilot...
Subsection 115(4) - Non-resident’s income from Canadian resource property
Administrative Policy
16 June 2014 External T.I. 2013-0515431E5 - International traffic and airline enterprise
During peak season, Canco, which transports passengers to destinations inside and outside Canada, is supplied planes and non-resident pilots and...
93 CPTJ - Q.10
If a non-resident disposes of some, but not all, of its Canadian resource properties, whether ss.115(4)(a) to (c) apply may depend on whether it...