Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
1-951103
XXXXXXXXXX J.D. Brooks
Attention: XXXXXXXXXX
XXXXXXXXXX
Attention: XXXXXXXXXX
April 25, 1995
Dear Sirs:
Re: XXXXXXXXXX
Advance Income Tax Ruling
This is further to our letter of December 22, 1994 which was in reply to your letter of May 17, 1994 in which you requested an advance income tax ruling on behalf of XXXXXXXXXX.
At the time of writing our letter, we were not able to provide a ruling on income derived from the Funds by an Indian resident on a reserve. I apologize for the time it has taken to reach a conclusion.
As you know, there has been some uncertainty as to how the decision of the Supreme Court of Canada in Williams v. Her Majesty the Queen (92 DTC 6320, (1992) 1 CTC 225) should apply in instances such as those for which you have requested a ruling.
The Court noted that "the purposes of the conflict of laws have little or nothing in common with the purposes underlying the Indian Act." "The test for situs under the Indian Act must be constructed according to its purposes, not the purposes of the conflict of laws", and so it is not appropriate to simply adopt general conflict of law principles when determining whether income is connected to a reserve.
One general direction provided by the Court in Williams was that "an overly rigid test which identified one or two factors as having controlling force has its own potential pitfalls. Such a test would be open to manipulation and abuse, and in focusing on too few factors could miss the purposes of the exemption in the Indian Act as easily as a test which indiscriminately focuses on too many."
As the location of the debtor is not necessarily the deciding factor in determining whether income is located on a reserve, we are not able to provide a promoter with assurance as to the tax treatment of investors. Individual investors can request confirmation from the Department of the taxability of their investment in one of the Funds of XXXXXXXXXX.
I trust that I have explained the situation and I hope that these comments will be of use to you.
Yours sincerely,
B.W. Dath
Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1995
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1995
Email this Content