Section 250


Thomson v. Minister of National Revenue, 2 DTC 812, [1946] S.C.R. 209

For a number of years the taxpayer spent between 81 and 159 days in Canada each year, with most of the balance spent in the United States. The taxpayer argued that he was not "ordinarily resident" for the purposes of what was then s. 9 (now reformulated in ss. 2(1) and 250(1)).

Rand J. set out the scope of "residence" at pp. 224-25:

For the purposes of income tax legislation, it must be assumed that every person has at all times a residence. It is not necessary to this that he should have a home or a particular place of abode or even a shelter. He may sleep in the open. It is important only to ascertain the spatial bounds within which he spends his life or to which his ordered or customary living is related.

The Court rejected the taxpayer's appeal. Kurwin J. at p. 214:

The appellant seeks to make himself a sojourner as he carefully remained in Canada for a period or periods amounting to less than 183 days during each year. This attempt fails. The family ties of his wife, if not of himself, the erection of a substantial house, the retention of the ser­vants, together with all the surrounding circumstances, make it clear to me that his occupancy of the house and his activities in Canada comprised more than a mere temporary stay therein.

Estey J. also stated for the majority at p. 233 that, throughout the Income Tax Act, "during" means "in the course of."

Words and Phrases
during residence

Subsection 250(1) - Person deemed resident

Paragraph 250(1)(a)

See Also

Dysert v. The Queen, 2013 DTC 1070 [at 373], 2013 TCC 57

The taxpayers were middle-aged "all American" certified cost estimate professionals, with no significant previous exposure to Canada, who came to Alberta under two-year contracts (later extended by two years) to work on the Syncrude project. Although they acquired and modestly furnished apartments in Alberta, they maintained their substantial homes in the U.S. where their families stayed (other than for short visits to Alberta) and otherwise maintained their social ties and financial assets in the U.S. After finding that the taxpayers were not ordinarily resident in Canada, Boyle J. found (at para. 43) that this factual situation "clearly meets the intermittent, temporary visit or stay parts of the meaning given to sojourn ... in Thomson" and that "a business trip is one of the specific examples set out by Professors Hogg and McGee of sojourning. [Principles of Canadian Income Tax Law, 2nd ed. (Scarborough, Ont.: Carswell, 1997) at 120.]" Accordingly, the taxpayers were deemed to be resident in Canada under s. 250(1)(a).

Words and Phrases

Administrative Policy

S5-F1-C1 - Determining an Individual’s Residence Status

To sojourn means to make a temporary stay in the sense of establishing a temporary residence, although the stay may be of very short duration. For example, if an individual is commuting to Canada for his or her employment and returning each night to his or her normal place of residence outside of Canada, the individual is not sojourning in Canada. On the other hand, if the same individual were to vacation in Canada, then he or she would be sojourning in Canada... .

22 March 1995 External T.I. 9504635 - WITHHOLDING TAX FOR NON-RESIDENT COMMUTERS (HAA 8019-1)

"Generally if a taxpayer commutes to work in Canada for more than 182 days in a year and returns to his home daily to a country outside Canada, he will not be considered to sojourn in Canada for more than 182 days in that year ... ."

17 February 1995 External T.I. 9400545 - RESIDENCE & SOURCE DEDUCTIONS (HAA7576-1)

"It is a question of fact whether a taxpayer, who is a resident of a foreign country and who is present in Canada for more 182 days in a year, sojourns in Canada for more than 182 days in that year. It is the Department's view that generally if a taxpayer commutes to work in Canada for more than 182 days in a year and returns to his home daily to a country outside Canada, he will not be considered to sojourn in Canada for more than 182 days in that year ... . However, depending on the facts, there are instances that such a taxpayer may be considered to be ordinarily resident in Canada ... ."

1 June 1990 T.I. (November 1990 Access Letter, ¶1517)

Comments on the meaning of the word "sojourn" in the context of the application of s. 56(1)(o).

87 C.R. - Q.4

A U.S. resident who sojourns in Canada for 183 days or more will be required to report his world income, will be entitled to deduct amounts exempted by the Convention, and will be entitled to claim full personal exemptions.


Brian Kearl, Carl Deeprose, "Leaving Canada's New High Tax Rate Regime: Considerations, Tips and Traps", 2016 Conference Report (Canadian Tax Foundation),32:1-24

Meaning of “sojourn” (pp. 32:5)

In Thomson, the Supreme Court of Canada touched on the meaning of the word "sojourn" in obiter dictum, stating that "[o]ne 'sojourns' at a place where he unusually, casually or intermittently visits or stays". The Federal Court of Appeal affirmed this statement in Dixon [Footnote 29 – Dixon v R, 2001 DTC 5408, at para 6].

R & L Food Distributors [77 DTC 411][stated:]

… [I]t is obvious that coming from one country to work for the day at a place of business in another country and thereafter returning to one's permanent residence in the evening is not tantamount to making a temporary stay in the sense of establishing even a temporary residence in the country where the business enterprise is situate.

Words and Phrases

Paragraph 250(1)(c)

See Also

Messar-Splinter v. The Queen, 2012 DTC 1236 [at 3659], 2012 TCC 72

The taxpayer moved to Geneva in 1994 with her husband, who took a position described in s. 250(1)(c)(i), working as a public servant for the Permanent Mission of Canada in the Office of the United Nations. Paragraph 250(1)(e), repealed in 1999, provided that the spouse of a person describe in paras (b)-(d.1) was also deemed to be a resident of Canada. The taxpayer took a position with the mission in 1997. The Minister took the position that the taxpayer was resident in Canada immediately before her appointment (because of s. 250(1)(e)), and therefore was a resident of Canada under s. 250(1)(c) in all the following years that she remained at the Mission. The taxpayer appealed an assessment of her 2006 taxation year.

Favreau J. granted the taxpayer's appeal. The phrase "was resident in Canada immediately prior to appointment or employment in Canada" refers only to the ordinary meaning of residence and not to a presumption of residence.

Administrative Policy

S5-F1-C1 - Determining an Individual’s Residence Status

b) [I]ndividuals who were officers or servants of Canada or a province, at any time in the year, who received representation allowances or who were factually or deemed resident in Canada immediately prior to appointment or employment (see ¶1.35) by Canada or the province [are deemed to be so resident].


For purposes of (b) above, it is the CRA's position that the phrase immediately prior to appointment or employment refers to the time immediately prior to the time at which the individual is hired. For greater certainty, it does not refer to the time immediately prior to the time the individual starts work.

26 May 1994 Internal T.I. 9333317 F - Crown Corp. Employees Working Outside Canada (T2 File)

An individual working in Japan for a provincial government supposedly as an independent contractor likely would in fact be an employee in light of the control test and four-in-one ("entrepreneur") test.

Subsection 250(3) - Ordinarily resident


Midyette v. The Queen, 85 DTC 5565, [1985] 2 CTC 362 (FCTD)

S.250(3) is not a deeming provision because it does not impose a meaning on "residence" that that term would have in the absence of the provision. The purpose of s. 250(3) is only to make it clear that "residence" does not have a narrow meaning of "actual physical presence at any given time", but instead refers "to the circumstantial concept of the person who has centralized his ordinary mode of living at some place in Canada or has maintained a sufficient nexus or connection therewith as to be logically regarded as being ordinarily resident in Canada, even though physically absent therefrom."

Words and Phrases

See Also

Laurin v. The Queen, 2007 DTC 236, 2006 TCC 634

Before going on to find that the taxpayer was not ordinarily resident in Canada, Bowman C.J. stated (at p. 237):

"The use of the word 'includes' in subsection 250(3) seems to imply that there could be a third (undefined) category of Canadian resident who is neither deemed under subsection 250(1) to be a resident of Canada nor 'ordinarily resident' within the meaning of subsection 250(3). It is not clear just what the characteristics of such a form of residency might be."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) 92

Subsection 250(4) - Corporation deemed resident


The Queen v. Gurd's Products Co. Ltd., 85 DTC 5314, [1985] 2 CTC 85 (FCA)

The Court accepted the Crown's contention that the following elements were sufficient indication that the appellant carried on business in Canada: (1) the execution of a plan of subterfuge by a Toronto agent with limited authority appointed by the appellant's American board of directors, to deceive the appellant's Iraqi customers into believing that they were purchasing products from a bona fide manufacturing business carried on in Canada and not in the United States; the subterfuge included the execution of certain documentation in Toronto, and the use of a Toronto address for the remittance and receipt of virtually all correspondence to and from Iraq; and (2) the carrying out of banking operations through the CIBC in Toronto to which profits were originally remitted.

It was found that Canada was the jurisdiction where the operations took place from which the appellant's profits arose.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 180 - Subsection 180(3) 54

Birmount Holdings Ltd. v. The Queen, 78 DTC 6254, [1978] CTC 358 (FCA)

A corporation which was owned by a non-resident individual ("Mentzelopoulos") and whose business was found to be the acquisition, supervision, maintenance and ultimate sale of a property located in Scarborough, was held to be resident in Canada. "[T]he management of the appellant's business and the controlling power and authority over its affairs were vested in the three Canadian directors who exercised that power and authority in Canada. The directors, through their manager, Royal Trust, leased the property, collected the rents, inspected the property, paid the taxes and made the mortgage payments ... When it came to substantial monetary outlays, Mr. Mentzelopoulos was consulted but in myriad other matters, he was not consulted." Tara was distinguished on the ground that in that case, all the company's decisions were made in Ireland.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 180 - Subsection 180(3) 88
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate farmland acquired with a view to development potential, and sold 11 years later on income account 149

Deltona Corp. v. MNR, 71 DTC 5186, [1971] CTC 297 (Ex Ct), briefly aff'd 73 DTC 5180, [1973] CTC 215 (SCC)

although an amalgamated corporation was "continued" from its predecessors on amalgamation, it came into existence on the amalgamation

A corporation which in 1966 was "continued" under the Canada Corporations Act from its predecessors pursuant to their amalgamation, was "incorporated" after 1965, so that it was deemed to be resident in Canada. Cattanach J stated (at pp. 5199-5200):

As previously there were two companies and after the issue of the letters patent there is only 'one company', it seems to follow that that 'one company' is a company that did not previously exist and that came into existence at that time. ...

[O]nce it is accepted that amalgamation results in a corporation that did not exist before, it follows that it is, among other things, the 'incorporation' of that new corporation"

Words and Phrases

Administrative Policy

14 December 1990 T.I. (Tax Window, Prelim. No. 2, p. 4, ¶1047)

S.250(4) was enacted to address the situation where a corporation is incorporated in Canada for the purpose of an activity such as a construction project, has its place of effective management in Canada and then, at the completion of the project, moves its place of effective management to a country which uses place of management as the test for residence and in its treaty with Canada.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 4 46


Talakshi, "Corporate Migration", 1991 Canadian Petroleum Tax Journal, Spring 1991, p. 53.

Subsection 250(5) - Deemed non-resident

See Also

Antle v. The Queen, 2009 DTC 1305, 2009 TCC 465, aff'd 2010 DTC 5172 [at 7304], 2010 FCA 280

After finding against the taxpayer on other grounds, Campbell Miller, J. found that s. 250(5) would not cause a Barbados trust, that was intended under a tax plan to be deemed by s. 94(1)(c)(i) to be resident in Canada for purposes of Part I of the Act, to be deemed not to be resident in Canada for purposes of the Act. First, in order for s. 250(5) to apply, the trust was required to be resident in Canada for purposes of the Act, whereas under s. 94(1)(c)(i), it was only deemed to be resident in Canada for purposes of Part I, second, as there is no application of the tie-breaker rules in the Canada-Barbados treaty, the trust had not been found not to be resident in Canada under that treaty.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) interjection of Barbados trust defeated policy 179

Administrative Policy

24 May 2018 External T.I. 2017-0710641E5 - Interest Charge Domestic International Sales Corp

whether a corp resident in the U.S. for Treaty purposes is deemed to be resident there for ITA purposes

In the course of confirming that an “Interest Charge Domestic International Sales Corporation, would qualify as a resident of the U.S. for surplus-computation purposes, CRA noted that its central mangement and control was in the U.S.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(11.2) U.S. IC-DISC is “resident” of the U.S. for Treaty purposes as the U.S. asserts its jurisdiction to tax and grants benefits only on continued meeting of conditions 395
Tax Topics - Income Tax Regulations - Regulation 5907 - Subsection 5907(1) - Exempt Earnings - Paragraph (d) CMC of FA must be in the DTC and it must be liable to tax therein (albeit, may be conditionally exempted) 233

S5-F1-C1 - Determining an Individual’s Residence Status

Where subsection 250(5) applies, an individual will be deemed to be a non-resident of Canada for all purposes of the Act (that is, the individual will cease to be a resident of Canada from that time). The rules applicable to individuals ceasing to be resident in Canada, including the provisions deeming an individual to dispose of certain property and the Part XIII withholding tax provisions, will apply from that date... .

3 November 2008 External T.I. 2008-0278431E5 F - Déménagement hors Canada du siège soc. de société

central management and control test overridden

In the context of a general discussion of consequences where there was an acquisition of control of a corporation incorporated in Canada in 2005, but with a shift of its sales and administrative functions to a non-resident location, CRA indicated that even if its central management and control had moved to outside Canada, it would continue to be deemed by s. 250(4) to be resident in Canada, unless by virtue of an applicable tax treaty it was deemed to not be resident by virtue of s. 250(5). CRA also noted:

A non-resident corporation would be required to file a T2 return even if it claimed an exemption from Canadian tax under a tax treaty on all profits and gains.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) OECD Commentary informs allocation of sales through non-resident office to Cdn manufacturing operation 172
Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Investment Tax Credit - Paragraph (a.1) ITC potentially available to a non-resident corporation carrying on business in Canada 97
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(b) s. 4(1)(b) requires allocation between Canada and another country on basis of relative profit contribution 172

27 June 1994 External T.I. 9406005 - CORPORATE STATUS OF A DELAWARE LLC (4093-U5-100-4)

If a Delaware limited liability company having its central management and central in Canada is treated as a partnership rather than a corporation for purposes of the Internal Revenue Code, with the result that the shareholders rather than the company are liable to tax under the Code on the income of the company, paragraph 3 of Article IV of the Canada-U.S. Convention will not apply, s. 250(5) of the Act will not apply, the company will not be a foreign affiliate and will be taxed under the Act as a resident of Canada.

Subsection 250(5.1) - Continued corporation

Administrative Policy

4 April 2011 External T.I. 2010-0388741E5 F - Société quittant le Canada

no requirement to file Canadian returns following continuance

In the course of a general discussion of the continuance of a corporation from Canada to Europe, CRA stated:

A corporation that is continued may, depending on the circumstances, be considered to have ceased to reside in Canada. Indeed, under subsection 250(5.1), a corporation continued in another country would be considered to be incorporated in the other country from the date of continuance, and would no longer be deemed to be resident in Canada under paragraph 250(4) from that date. If, following its continuance, a corporation ceased to reside in Canada, it would generally no longer be required to file Canadian tax returns for taxation years subsequent to the change of residence (assuming no activity or income from Canadian sources).

CRA went on to discuss the application of ss. 128.1(4) and 219.1.


Lanthier, "Corporate Immigration, Emigration, and Continuance", 1993 Corporate Management Tax Conference Report, c. 4.

Subsection 250(6) - Residence of international shipping corporation

Administrative Policy

23 June 1992 T.I. 912669 (December 1992 Access Letter, p. 39, ¶C248-121)

Detailed discussion.

2 July 1991 T.I. (Tax Window, No. 5, p. 15, ¶1326)

General discussion.


Michael Shields, "Taxation of International Shipping Companies in Canada", International Tax (Wolters Kluwer CCH), No. 88, June 2016, p. 1

Assimilation of connected income (p. 4)

[G]ross revenue from international shipping can only be earned from activities associated with vessels that are owned within the related group; however, once this hurdle has been passed, virtually all revenue connected with these vessels should qualify as international shipping. For example, revenue earned from employees that provide strategic, operational or administrative assistance to companies within the group that earn international shipping income should qualify as gross revenue from international shipping.

As well, dividend income and interest income from entities that carry out international shipping operations should qualify as long as the company owns an eligible interest…

Potential application of corporate emigration rules where initial inactivity (p. 4)

For a foreign company to be deemed to be resident outside of Canada, all or substantially all of the company's revenues must be from international shipping or dividends and/or interest from certain eligible entities. [f.n. … 250(6)(b)] In years that the company does not receive any gross revenues, it is unclear whether this test can be met. For example,

(a) It is not uncommon for shipping companies to hold each vessel in a separate company and to contract with third-parties to construct these vessels with the construction period lasting two or more years. During that time, the company may earn no income or may earn a very small amount of non-qualifying income…

[A] holding company to hold shares in certain vessel operating companies…may not receive any dividends from its underlying subsidiaries resulting in the company having no gross income during the year.

[I]n a subsequent year when the company did earn income that qualified it to be treated as a non-resident of Canada under the Residency Exemption, the company would be treated as if it migrated from Canada and as a result, would pay tax on the accrued gains…

Owen, "Tax Issues in International Shipping", 1993 Canadian Tax Journal, Vol. 41, No. 4, p. 724.

Subsection 250(6.1) - Residence of inter vivos trusts

Administrative Policy

S6-F1-C1 - Residence of a Trust or Estate

1.12 Subsection 250(6.1) operates to avoid unintended tax consequences that may arise under a number of provisions of the Income Tax Act that require a trust to be resident in Canada throughout a tax year. Specifically, subsection 250(6.1) deems a trust that ceases to exist at any time in a tax year to be resident in Canada during the remaining period in the year if it was resident in Canada immediately before it ceased to exist.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) 237