Words and Phrases - "temporary nature"
14 September 2000 Internal T.I. 2000-0035797 F - ALLOCATION DE SEJOUR
Before discussing the conditions that would need to be satisfied for allowances paid under an internship program to cover foreign living expenses to be excluded under s. 6(6)(a)(i), the Directorate first noted, regarding the s. 6(6) exception, that:
The purpose of this exception is to recognize that where an employee is required to work on a temporary basis at a work location that is a significant distance from the employee's usual place of residence, it would not be reasonable to expect the employee to dispose of the employee’s current residence and move to the new location for a short period of time. In addition, this paragraph recognizes that where an employee continues to incur expenses in order to maintain the employee’s principal place of residence without receiving rental income in return, a benefit is not provided if the employer makes available, or reimburses, the expenses incurred in connection with a temporary residence at the particular work site.
The Directorate then stated:
As a general rule, duties will be considered to be of a temporary nature if it can reasonably be expected that they will not provide continuous employment beyond a period of two years. …
[T]he term “maintained” must be interpreted as meaning “incurred expenses in respect of the self-contained domestic establishment (residence)”.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(b) - Subparagraph 6(1)(b)(iii) | representation allowance must cover additional expenses from being posted abroad | 70 |
20 February 2004 External T.I. 2003-0035361E5 F - Chantier particulier - travail temporaire
A Band Council of an Indian Reserve employed non-aboriginal staff at the reserve, who lived in housing on the reserve, but also might have a home off-reserve to which they would travel on weekends. In addition to their base salaries, they were paid a cost of living premium and a transportation premium. Were the premiums excludable from income pursuant to s. 6(6) where the employee signed a one-year contract with the Band Council that had been renewed every year for the past five years, or where the employee instead signed a 3-year contract with the Council. CRA responded:
[Y]ou have indicated that the term of the employment contract is generally one year and that the possibility of renewal is known at the outset. In addition, you have indicated that it is often the case that an employee can renew the employee’s contract. In those circumstances, we doubt that the work of the employees is of a temporary nature and, in our view, the … premium could not be excluded from the employees' income by virtue of subsection 6(6).
However, if an Employee were offered a three-year term of employment with no possibility of extension, we are of the view that a single three-year term could be work of a temporary nature.
27 September 2013 External T.I. 2012-0472981E5 F - Chantier part. - nature temporaire
In the course of a general discussion of the meaning of "duties … of a temporary nature," CRA stated:
[W]here an employer offers its employees a contract of employment of less than two years but the possibility of renewal of the employment contract is known from the outset and/or if it often happens that the employees of this employer renew their employment contracts, it is unlikely that the duties of the employees will be of a temporary nature. …
When the duration of a posting at a particular place of employment is not clearly indicated at the outset by the employee and the employer and that period actually lasts more than two years, it is generally considered that the work has never been of a temporary nature. …
Where the employee and the employer do not clearly indicate the length of a posting at a particular work location, the intention of the parties to the effect that the assignment is temporary should be clearly demonstrated by other means to determine whether subsection 6(6) applies to the situation.
15 December 2014 Internal T.I. 2014-0544121I7 F - Chantier particulier
Regarding a situation where the taxpayer was hired temporarily to help address a temporary work backlog at a remote work site but then was retained once it became clear that another worker had definitively left the work site, the Directorate stated that the determination as to whether a work engagement is temporary generally must be made at its commencement based on the following factors:
- the nature of the duties to be performed by the employee (certain types of work are, by their nature, short term engagements, such as repair work or trades which are involved only during a certain phase of a project);
- the overall time estimated for a project, or a particular phase of a project, on which the employee is engaged to perform duties; and
- the agreed period of time for which the employee was engaged according to the employment contract or other terms of the engagement.
Consideration should also be given, inter alia, to the possibility that the employment contract may be renewed and evidence of an intention to work there temporarily or otherwise.
As indicated in the Bulletin, should these factors change after employment commences, it may be necessary to redetermine whether the duties undertaken by the employee are considered to be of a temporary nature for the purposes of the special work site exclusion.
In relation, to the particular situation, the Directorate indicated that the work engagement ceased to be temporary at a redacted juncture.