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.
Principal Issues: Indian employment income exemption
Position: Not exempt
Reasons: Duties off reserve; employer not resident on reserve.
May 6, 1999
Shawinigan Tax Centre HEADQUARTERS
D. Duff
Attention: Michael Benedict
990801
Status Indian’s Employment Income earned on Inuit Land
This is in reply to your round trip memorandum of March 22, 1999, and further to the telephone conversation of May 5, 1999 (Benedict/Duff) regarding the taxation of XXXXXXXXXX employment income.
XXXXXXXXXX was employed by XXXXXXXXXX is a status Indian as defined in the Indian Act and in XXXXXXXXXX he was living on the XXXXXXXXXX reserve.
XXXXXXXXXX is not situated on a reserve. This company acted as a manager for XXXXXXXXXX, a company situated on Inuit land owned by XXXXXXXXXX, an Inuit living in XXXXXXXXXX employment duties were performed on these lands and they are not reserves under the Indian Act.
XXXXXXXXXX accountant has requested that his employment income for the aforementioned period be considered to be exempt from taxation pursuant to the provisions in the Indian Act.
Paragraph 81(1)(a) of the Income Tax Act exempts from tax those amounts declared exempt by another act of Parliament. Section 87 of the Indian Act provides that the personal property of an Indian situated on a reserve is exempt from taxation, and the courts have determined that employment income is considered personal property. Reserves are defined in section 2 of the Indian Act as a tract of land, the legal title to which is vested in Her Majesty, that has been set apart for the use and benefit of a band. Also, subsection 4(1) of the Indian Act states that a reference to Indian does not include an Inuit.
The Department has issued the Indian Act Exemption for Employment Income Guidelines to assist individuals to determine when their employment income would be considered exempt under the Indian Act. XXXXXXXXXX cannot meet any of the exemptions in this situation because none of his employment duties were performed on a reserve and his employer did not reside on a reserve.
Roberta Albert, C.A.
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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