17 May 1994 Internal T.I. 9411136 - APPLICATION OF GST CREDIT TO DEEMED RESIDENTS (7576-1)

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:

Deemed v. Factual Residence - Goods & Service tax Credit

Position TAKEN:

Deemed Resident are an "eligible individual"

Reasons FOR POSITION TAKEN:

	Deemed residents are resident throughout the taxation 	year.

		                                        May 17, 1994

	International Taxation Office 	          Rulings Directorate
P. Schryburt	                            Jim Wilson
	Assistant Director	                      957-2123

Attention: G. Rowland

									                                         941113

Goods & Service Tax Credit ("GSTC") - Deemed Residents

This is in reply to your memorandum of April 25, 1994, in which you requested our comments on the interaction of subsection 250(1) and paragraph 122.5(5)(c) of the Income Tax Act ("Act"). Your situation involves a taxpayer who sojourned in Canada for more than 183 days in both 1992 and 1993 and was deemed to be resident in Canada throughout both taxation years pursuant to subsection 250(1) of the Act. The taxpayer left Canada permanently in September of 1993 and you wish to know whether he is entitled to the October 1993 GSTC payment described in subsections 122.5(3) and (4) of the Act.

It is a question of fact whether an individual is sojourning or residing in Canada. Where an individual is considered a factual resident of Canada, the deemed resident rules in subsection 250(1) of the Act do not apply. We have not been provided the facts which would allow us to make a determination of the individual's residence status. However, since it would appear that the taxpayer was present in Canada for a period in excess of 365 consecutive days, it is likely that the taxpayer established enough of a routine of life in Canada to distinguish himself from a sojourner. Where the individual was a factual resident of Canada, on the assumption he severed his residential ties with Canada in September 1993, he would not meet the definition of "eligible individual" in subsection 122.5(1) of the Act for the 1993 taxation year and would not be entitled to the GSTC for 1993 as computed under subsection 122.5(3) of the Act.

Where a residence determination has been made and it is concluded that the taxpayer is in fact sojourning in Canada, we agree with your analysis that subsection 250(1) of the Act deems the individual to be resident in Canada throughout the taxation year and that for purposes of the definition of "eligible individual" in subsection 122.5(1) and the application of paragraph 122.5(5)(c) of the Act, the individual would be considered to be resident in Canada on December 31, 1993 and October 1, 1993, as the case may be.

for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch