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Nonresidents Detained in Canada Because of COVID-19 Will Not Trigger Canadian Tax Issues

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By Jyme Mariani, Esq. | 24 Jun 2020

Nonresidents in Canada who cannot return to their own country because of the coronavirus pandemic (COVID-19) will not trigger a presence in the country for tax purposes, the Canada Revenue Agency (CRA) said [CRA, Guidance on International Income Tax Issues Raised by the COVID-19 Crisis].

Effective Dates
The CRA said the guidance applies from 16 March through 29 June 2020, although the timeline may be extended, if necessary. However, it is possible that income tax issues may arise from travel restrictions instituted by another country independent of those instituted by Canada.

Extra Time Will Not Count Toward 183-Day Limit
Nonresidents who normally work outside of Canada but are unable to leave the country due to COVID-19-related travel restrictions will not have the extra time spent in Canada count toward the 183 days that trigger a taxable presence or residency in the country, the CRA said. The eased restrictions apply both for individual tax purposes and for purposes of determining a specific type of permanent establishment of a foreign company.

Email Address for Questions
Taxpayers who have specific questions can email [email protected].

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association.