a) Differentiation between Contract of Employment and Contract for Employment

1. Definition: The Personal Income Tax Act defines employment broadly, whereas the Labour Act specifies a “contract of employment” as any agreement where one person agrees to serve an employer.
2. Nature of Relationship: In a contract of employment, an individual is an employee receiving salary, while a contract for employment refers to independent contractors who receive profit.
3. Tax Assessment: Employees are taxed on an actual year basis, while independent contractors follow a preceding year basis.
4. Rights and Protections: Employees have legal protections like redundancy payments, whereas independent contractors do not.

b) Residence Determination for Tax Purposes

1. Ordinary Individuals: Resident where they have a domestic place available on January 1 of the assessment year.
2. Executors: Residence is based on the deceased’s last location.
3. Trustees: Deemed resident where the trust income arises or as directed by FIRS if indeterminate.
4. Partners in Partnerships: Resident where the principal office is situated as of January 1.
5. Indigenous Communities: Resident in their community’s location.
6. Foreign Employment Holders: Resident where the principal office of the employer is located on January 1.