Income Tax Severed Letters - 2021-11-03

Technical Interpretation - External

8 September 2021 External T.I. 2021-0891931E5 - Director's Fees - Whether Guideline 3 would apply

Unedited CRA Tags
81(1)(a)

Principal Issues: Whether Guideline 3 of the Indian Act Exemption for Employment Income Guidelines would apply to exempt from tax the director’s fees earned by an individual, who is registered as an Indian under the Indian Act, and who performs their duties as a director from an on-reserve home office and/or on-reserve business office as a result of the COVID-19 pandemic.

Position: No.

Reasons: The Guidelines are an administrative tool intended to deal with the most common employment situations. Director’s fees received by corporate board members are considered employment income; however, they are not the type of employment income to which the Guidelines apply. The connecting factors test must be used.

21 June 2021 External T.I. 2021-0892971E5 - Mineral Resource - Gold and Gravel Deposits

Unedited CRA Tags
Definition of "mineral resource" in subsection 248(1)

Principal Issues: Whether the gold deposit and the gravel deposit on the property fall within the definition of "mineral resource" in subsection 248(1).

Position: The gold deposit is a mineral resource but the gravel deposit is not.

Reasons: Since gold is a precious metal, the gold deposit qualifies as a "mineral resource" under paragraph (a) of that defined term in subsection 248(1). The gravel deposit is not eligible for certification as a "mineral resource" under subparagraph (d)(i) of that defined term because there is no principal mineral being extracted from the gravel deposit and because it is a bedded deposit.

Technical Interpretation - Internal

7 July 2021 Internal T.I. 2021-0890141I7 - Scholarship exemption

Unedited CRA Tags
56(1)(n); 56(3); 56(3.1); 118.6(1)

Principal Issues: Whether financial assistance received by students for the cost of travel, under Indigenous Services Canada’s Post-secondary Student Support Program and Inuit Post-Secondary Education Strategy , would be included in the amount of the student’s scholarship exemption, pursuant to paragraph 56(3) of the Income Tax Act.

Position: Question of fact, but likely yes, if the recipient is considered a qualifying student as defined in subsection 118.6(1) of the Income Tax Act.

Reasons: A scholarship or bursary will not be considered to be received in connection with the individual’s enrolment in an educational program except to the extent that it is reasonable to conclude that the award is intended to support the individual’s enrolment in the program.