Principal Issues:
1.What is the basis for determining whether an Indian's business income is considered to be connected to a reserve and therefore exempt from taxation under paragraph 81(1)(a)?
2.Do treaties with Indians not provide tax exemption?
Position:
1.Consider whether the place of business (formerly referred to as "the permanent establishment") is located on reserve. To determine this, consider:
- the place where the business activities are carried out, viz., where employees report for work, where transactions with customers are arranged, and where the inventory is located;
- the location of the head office; and
- the location of the books and records.
2.No.
Reasons: