The Sojourner Rule

One of the tests for residency in Canada is called the “Sojourner Rule”. This rule is somewhat similar (but less complex) to the U.S. “substantial presence” test. It would deem a person who is otherwise not a resident of Canada to be resident in Canada for tax purposes if he “sojourned” here for a period of 183 days or more. If this test is met, the individual is deemed to be a Canadian resident for the full year and is subject to tax in Canada on his or her world income, subject to any treaty provision that would override the rule.

Now, what does it mean to sojourn? According to the courts, and the CRA, to sojourn means to be “temporarily present”. Days are calculated such that a part of a day in Canada is considered a full day.

In a recent technical interpretation, the CRA was asked whether, in two hypothetical situations, a taxpayer was ‘‘sojourning’’ in Canada. In the first scenario, the taxpayer arrived in Canada by airplane and had a several hour stopover in Toronto before departing for another destination outside Canada. In the second scenario, the taxpayer arrived in Canada by airplane in the morning and departed by return f light in the evening. The CRA stated that ‘‘sojourn’’ means to make a temporary stay in a place, to remain, or reside for a time. The courts have held that arriving in the morning from another country to work in Canada for the day and then departing in the evening is not tantamount to making a temporary stay akin to sojourning.

The CRA stated that, in the current situation, neither of the described scenarios would be tantamount to a temporary stay and thus would not be sojourning for the purpose of the deemed residency rules.

To “sojourn” means to make a temporary stay in the sense of establishing a temporary residence, although the stay may be of very short duration. For example, if an individual is commuting to Canada for his or her employment and returning each night to his or her normal place of residence outside of Canada, the individual is not “sojourning” in Canada. On the other hand, if the same individual were to vacation in Canada, then he or she would be “sojourning” in Canada and each day (or part day) of that particular time period (the length of the vacation) would be counted in determining the application of the rule.

If you need more information on the sojourning rule, you should check out CRA’s interpretation bulletin IT-221R3.

2 thoughts on “The Sojourner Rule

  1. Pingback: US Residecy for Canadians « The Tax Issue

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