K. Hillier Rulings Directorate Director G. Arsenault Non-Resident Taxation 957-2126
7-4731
Employees of a Country other than Canada
This is in reply to your Memorandum dated February 16, 1990 whereby you requested our opinion as to whether the exemption from tax liability under Part I of the Act granted by paragraph 149(1)(a) are satisfied, the individual will be exempt from tax liability under Part I in respect of all types of income that are included in determining the individual's taxable income, including capital gains. However, if the individual is in receipt of business income or income from employment from a source in Canada, other than from his employment with the foreign government, the requirements of clause (iii) of paragraph 149(1)(a) will not be net and the exemption will not be available.
It is principally a question of fact whether gains realized on the disposition of property constitute capital gains or business income. Business income of course includes gains realized from an adventure in the nature of trade.
for Director Reorganizations and Non-Resident Division Rulings Directorate Legislative and Intergovernmental Affairs Branch