Principal Issues: 1. If the taxpayer, in discharging other duties unrelated to any activity or business in Canada, arrives by air from the UK with a several hour layover in Toronto departing for another destination outside of Canada, would this be considered a day for the purposes of paragraph 250(1)(a) of the Act?
2. If the taxpayer were to land in Canada at Toronto Pearson Airport in the morning and leave on a return flight to the UK that evening, would this be considered a day for the purposes of paragraph 250(1)(a) of the Act?
Position: 1. No 2. No
Reasons: The taxpayer is not considered to be sojourning for the purposes of paragraph 250(1)(a).
XXXXXXXXXX 2010-035553 M. Gauthier Attention: XXXXXXXXXX (613) 957-2095
February 19, 2010
Dear XXXXXXXXXX ,
Re: Paragraph 250(1)(a) of the Income Tax Act
We are writing to you in response to your letter requesting an interpretation regarding the 183-day sojourn rule in paragraph 250(1)(a) of the Income Tax Act (the "Act"). You request our interpretation on the following two hypothetical scenarios:
A. If the taxpayer, in discharging other duties unrelated to any activity or business in Canada, arrives by air from the UK with a several hour layover in Toronto departing for another destination outside of Canada, would this be considered a sojourning day for the purposes of paragraph 250(1)(a) of the Act?
B. If the taxpayer were to land in Canada at Toronto Pearson Airport in the morning and leave on a return flight to the UK that evening, would this be considered a sojourning day for the purposes of paragraph 250(1)(a) of the Act?
Facts as provided:
1. An individual is a resident of the United Kingdom where he works on a full time basis and maintains a permanent residence with his family.
2. The individual accepts a consulting assignment that often times brings him to Canada.
Our comments:
The decision in R&L Food Distributors Ltd v. M.N.R.,[1977] C.T.C. 2579 (T.R.B.), ("R&L Food Distributors") deals with the meaning of the word "sojourn" in paragraph 250(1)(a) of the Act. In that case, the taxpayers lived in Michigan. Their regular pattern was to commute on a daily basis to their place of employment in Windsor, Ontario and then return home that night. Paragraph 8 of the judgement reads as follows:
In The Shorter Oxford Dictionary the meaning of "sojourn" is given as "to make a temporary stay in a place; to remain or reside for a time". In perusing numerous cases decided by the Canadian and British courts, it 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.
The T.R.B concluded the Michigan residents were not "sojourning" in Canada on the days they spent in Windsor at their place of employment.
The Canada Revenue Agency (the "CRA") accepts the meaning given to "sojourn" in the R&L Food Distributors decision and has incorporated that meaning into the comments set out in paragraph 21 of Interpretation Bulletin IT-221R3 dated December 21, 2001, entitled "Determination of an Individual's Residence Status". In our opinion, neither of the individual's short visits to Canada described in scenarios A and B above, would be tantamount to making a temporary stay in the sense of establishing even a temporary residence in Canada. Accordingly, CRA would not consider such short visits as "sojourning" for the purposes of paragraph 250(1)(a) of the Act.
We hope this information is of assistance to you.
Yours truly,
Olli Laurikainen, CA
Section Manager for Division Director
International and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency