25 November 1998 Internal T.I. 9828447 - REMOTE WORK LOCATION

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.

Principal Issues: Does the fact that an employee in a remote work location has obtained the use of a self-contained domestic establishment from his employer prevent the application of subparagraph 6(6)(a)(ii) of the Act?

Position: Yes.

Reasons: Position set out in paragraph 13 of IT-91R4.

								November 25, 1998

	Northern B.C. and Yukon				HEADQUARTERS
	Tax Services Office				Jacques E. Grisé
Mr. Stephen Crout, Chief			957-2059
	Client Services
								982844

Fax from XXXXXXXXXX

We are attaching a fax received on November 2, 1998 from XXXXXXXXXX, concerning remote work locations for your response XXXXXXXXXX.

XXXXXXXXXX is particularly concerned with the Department's interpretation in paragraph 13 of Interpretation Bulletin IT-91R4, Employment at Special Work Sites or Remote Work Locations. Paragraph 13 of the bulletin, in part, essentially states that a reasonable expectation of establishing and maintaining a self-contained domestic establishment is considered to exist if the employer provides such an establishment to an employee at a work location. XXXXXXXXXX seems to be of the view that "establishing a self-contained domestic establishment" refers to the actual building or construction of such establishments as opposed, for example, to an employee establishing a home for himself or his family in a rental or employer-provided housing. In our view, XXXXXXXXXX interpretation is too restrictive and contrary to the apparent intention of the provision. The Federal Court - Trial Division in the case of Truemner v. The Queen, 89 DTC 5150, considered subparagraph 6(6)(a)(ii) of the Income Tax Act (the Act) by dealing with the difficulty of finding suitable apartment accommodation and thus the reasonableness of expecting the plaintiffs in the case to establish themselves in apartments.

Where an employee manages to establish and maintain a self-contained domestic establishment by the employee's own means (e.g., rental or construction) or through employer provided housing, the employee has gone beyond the requirement of expectation. Therefore, the value of, or an allowance in respect of, board and lodging in such cases would not qualify for the exemption in subparagraph 6(6)(a)(ii) of the Act.

We hope the above comments will be of assistance in your reply to XXXXXXXXXX.

J.F. Oulton, CA
Manager
Business, Property and Employment Income Section III
Income Tax Rulings and Interpretations Directorate

Enclosure