913067
19(1)
This is in reply to your memorandum of November 4, 1991 wherein you requested our opinion concerning the withholding of tax, CPP and UIC contributions with respect to salary paid to the above-referenced taxpayer.
24(1)
Paragraph 250(1)(e) of the Income Tax Act (the "Act") clearly indicates that a spouse of an officer or servant who was living with the officer or servant is deemed to be a resident of Canada if the spouse was resident in Canada in any previous year. In our view, based on the above facts, 19(1) was not a resident of Canada prior to 24(1)and consequently would not be deemed to be a resident of Canada prior to that time for purposes of paragraph 250(1)(e) of the Act.
It will be a question of fact whether 19(1) will be considered a resident of Canada for the period of time she is in Canada after 24(1) when applying paragraph 250(1)(e) of the Act in subsequent years. This determination will be made by the Non-Resident Taxation Division at 360 Laurier Street in Ottawa unless 19(1) becomes a deemed resident of Canada pursuant to paragraph 250(1)(a) of the Act. 24(1)
She will be subject to tax in Canada either as a resident of Canada under subsection 2(1) of the Act or as a non-resident of Canada pursuant to subsections 2(3) and 115(1) of the Act.
The fact that in this case paragraph 250(1)(e) of the Act and paragraph 17(e) of Interpretation Bulletin IT-221R2 appears to contradict the current guidelines for the "application and administration of the Locally-Engaged Staffs' Terms and Conditions Regulations" will not effect the above opinions. Those guidelines are correct where the Canadian-based public servants' spouse was resident in Canada in any previous year but they do not apply to such a spouse who was not resident in Canada in any previous year.
Accordingly, we are of the view that 19(1) and other staff in identical circumstances would not be considered deemed residents of Canada for purposes of paragraph 250(1)(e) where they were not residents of Canada in any previous year. However, an individual may qualify as a resident of Canada if he or she has sojourned in Canada for a period or periods the aggregate of is 183 days or more or actually establishes residential ties in Canada pursuant to the guidelines set out in Interpretation Bulletin IT-221R2 and the related Special Release.
We trust these comments are adequate for your purposes.
for DirectorReorganizations and Foreign DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch