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 ceased to be a Canadian resident on his departure for France, where he continued to be employed by the Canadian corporation, Although the Canadian corporation did not have an establishment in France, it was required to be registered with the responsible French organizations and to pay employer's contributions in France.
Before finding that the corporation could cease deducting tax at source at the time of the departure, CRA first noted that s. 115(2)(c) did not apply to deem the employment after the departure to be exercised in Canada, stating that:
You informed us that the employee, resident in France, will be taxed on the employee’s salary in France. Consequently … subsection 115(2) will not apply as condition [s. 115(2)(c)](iii) is not satisfied.