Principal Issues: [TaxInterpretations translation] (1) Should the judgment in Ginaud Dupuis v. The Queen 2009 TCC 220 be applied to taxation years of the taxpayer, other than 2003, and to other employees with the same employer and similar working conditions?
(2) If the answer to the first question is yes, how are the northern residents deductions under section 110.7 of the Income Tax Act to be calculated?
Position: (1) No.
(2) Not applicable.
Reasons: The Tax Court of Canada's decision, rendered under the Informal Procedure, applies only for one taxation year for a taxpayer. It does not automatically apply to other taxation years of the taxpayer or to other employees. The analysis of all the facts and the requirements of subsection 6(6) of the Act must be completed for each taxpayer for each taxation year. The eligibility for and calculation of the northern residents deductions must be determined under section 110.7, using Form T2222 and Interpretation Bulletin IT-91R4. We have also consulted informally with the Canada Revenue Agency's Litigation Office responsible for the file.
February 5, 2010
Jonquière Tax Services Office Income Tax Rulings Directorate
Client Services
Business and Partnerships Division
Lucie Allaire, Advocate, CGA.,D. Fisc.
Attention: Marie-Ève Duchesne 2009-034892
Application of the Tax Court of Canada decision in Ginaud Dupuis v. The Queen
This memorandum is in response to your email dated November 23, 2009, in which you requested our comments regarding the potential impact of the decision of the Tax Court of Canada ("TCC") in Ginaud Dupuis v. The Queen 2009 TCC 220 (the "judgment") and follows various telephone exchanges (Duchesne/Allaire).
Unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
In the judgment, the TCC allowed the taxpayer's appeal for the 2003 taxation year to, inter alia, allow him to exclude a board and lodging allowance by virtue of subsection 6(6). The TCC concluded, for the 2003 taxation year only, that the taxpayer's employment was of a temporary nature and that Mistissini was a location remote from any established community.
Therefore, you wish to know if the Canada Revenue Agency ("CRA") should apply the decision to other taxation years of the taxpayer for which the taxpayer is claiming the subsection 6(6) exemption. If so, you also wish to know how to calculate the northern residents deductions. Finally, you also wish to know if the judgment could also be applied to other employees of the same employer for whom the facts are similar.
Our Comments
Generally, all benefits received or enjoyed by an employee in respect of an office or employment are taxable. Subsection 6(6) provides an exception to this general rule by allowing certain benefits related to employment at a special work site or remote work location to be excluded from income.
The application of subsection 6(6) is a question of fact. Thus, an individual analysis of all the facts must be made for each employee for each taxation year.
In this regard, we are therefore of the view that the judgment represents the TCC's assessment of the facts for the taxpayer for the 2003 taxation year. Furthermore, the judgment, which was rendered under the informal procedure, has limited jurisprudential value. Therefore, we do not believe that the CRA should apply the decision to other taxation years of the taxpayer for which the taxpayer is claiming the subsection 6(6) exemption. Similarly, we do not believe that the judgment should be applied to other employees of the same employer.
We confirm that an individual could meet both the requirements for remote work location employment in subparagraph 6(6)(a)(ii) and special work site employment in subparagraph 6(6)(a)(i). However, the benefits could be excluded from the employee's income only once.
In addition, whether an individual is eligible for the northern residents deductions for a particular taxation year is also a question of fact.
For your information, please note that eligibility for and calculation of the northern residents deductions must be determined under section 110.7, using Form T2222 Northern Residents Deductions, while considering paragraphs 20, 21 and Appendix II of IT-91R4, Employment at Special Work Sites or Remote Work Locations.
Access to Information
For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, the electronic library version can be provided. Alternatively, the client may request a severed copy using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Ms. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
We hope that these comments are of assistance.
François Bordeleau, Advocate
Manager
Business and Partnerships Section
Income Tax Rulings Directorate.