I-3 - Taxation Act

Section 737.18.7.2 Disposition versions

2006-03-01

737.18.7.2. For the purposes of this Title, the employment contract that an individual entered into with an eligible employer, in this section referred to as the “original contract”, or a deemed contract within the meaning of subparagraph a of the third paragraph, is deemed to end at the time when the individual ceases to be a foreign specialist.

Where on 1 January 2001 an individual to whom the fourth paragraph applies holds employment with an eligible employer, the employment contract the individual entered into with that employer, in this section referred to as the “original contract”, is deemed to have ended before that date.

In addition, where at a particular time an individual would again become a foreign specialist if this section were read without reference to the first and second paragraphs and the portion of paragraph c of the definition of “foreign specialist” in the first paragraph of section 737.18.6 before subparagraph i and paragraph d of that definition were read with the reference to “from the particular time to the end of the year or the part of the year” replaced by a reference to “throughout the year or the part of the year”, the following rules apply:

(a)  the individual is deemed to enter into, with the eligible employer, a new employment contract, in this section referred to as the “deemed contract”, and that contract is deemed to be entered into before 13 June 2003; and

(b)  the individual is deemed to take up employment, as an employee, with the eligible employer at the particular time and is also deemed to begin at that time to perform the duties of that new employment.

The individual to whom the second paragraph refers is the individual who

(a)  is not resident in Canada immediately before taking up employment, as an employee, with the eligible employer;

(b)  has no exemption period that is running on 1 January 2001 in relation to that employment; and

(c)  may deduct, in computing the individual’s taxable income for a taxation year preceding the year 2001, in relation to that employment, an amount under section 737.18.10, or could so deduct such an amount if the eligible employer had not failed to apply, in respect of the individual, for a certificate referred to in paragraph f of the definition of “foreign specialist” in section 737.18.6, as it read for that preceding taxation year.

Where an individual holds employment with an eligible employer on 10 March 1999 under the original contract, but took up employment, as an employee, with that employer before that date, the following rules apply:

(a)  the third paragraph, where it applies for the first time since the original contract is deemed to have ended under the first or second paragraph, shall be read with the reference to “from the particular time” replaced by a reference to “from 10 March 1999”; and

(b)  if the second paragraph applies to the original contract, subparagraph a of the fourth paragraph shall be read as follows:

“(a) the individual is not resident in Canada immediately before 10 March 1999;”.

The expiry, termination or cancellation of the original contract or any other event having the effect of terminating the original contract also entails the expiry, termination or cancellation, as the case may be, of a deemed contract continuing the original contract, or otherwise terminates such a contract.

The renewal of the original contract also entails the renewal of a deemed contract continuing the original contract, except if the deemed contract is deemed to have ended under the first paragraph.

2004, c. 21, s. 140.