Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
942656
XXXXXXXXXX David R. Senécal
Attention: XXXXXXXXXX
January 9, 1995
Dear Sirs:
Re: Clause 115(2)(e)(i)(B) of the Income Tax Act
This is in reply to your letter of October 7, 1994, wherein you request our views as to the application of the above-cited clause of the Income Tax Act (the "Act") in the following situation:
Mr.X is a reporter for a Canadian newspaper and his employer has offered him a new position reporting for the newspaper in Africa and the Middle East. If Mr. X accepts the situation, he would sever all residential ties with Canada and take up residence in either Africa or the Middle East. Mr. X would continue to be an employee of and remunerated by the Canadian newspaper.
As your request deals with an actual fact situation rather than a hypothetical one, we are not in a position to deal with this matter other than in the form of an advance ruling request where the identity of the parties involved is known and all the facts surrounding the proposed transaction are presented to us. However, we provide you with the following general comments which may or may not apply to your specific situation.
The term "rendering of services" as it appears in clause 115(2)(e)(i)(B) of the Act is not defined therein. Therefore, it is our opinion that the term must be given its common, ordinary meaning and would include the performance of work or duties for a Canadian business enterprise in respect of an office or employment.
We, also refer you to the Department's Interpretation Bulletin IT-161R3 which outlines our general position on the application of clause 115(2)(e)(i)(B) of the Act. As indicated in paragraph 6 of the Bulletin, the Source Deductions Section at your local District Taxation Office may be consulted regarding the possible application of that clause in the case of Mr. X.
The foregoing comments are given in accordance with the practice referred to in paragraph 21 of Information Circular 70-6R2 and are not binding on Revenue Canada.
Yours truly,
for Director
Reorganizations and Foreign Division
Rulings Directorate
Policy and Legislation Branch
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