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:
1. Difference in application of the ITA in Quebec and Ontario
2. Application of the GST
Position:
1. Yes
2.Guidelines set in Technical Information Bulletin B039R on how
GST/HST applies to purchases by Indians.
Reasons:
1. Two tax returns to file in Quebec, only one in Ontario. Difference in the tax base for provincial taxes as calculation of provincial taxes in all provinces except Quebec is based on federal taxes.
2. Bulletin mentions that goods acquired on reserve by Indians are relieved of GST/HST. Mentions when goods acquired off reserve are relieved of GST/HST. Also indicates when service acquired by an Indian is relieved of GST/HST.
XXXXXXXXXX 1999-001575
M. Shea-DesRosiers
(613) 957-8953
February 8, 2000
Dear XXXXXXXXXX:
This is in reply to your letter of December 17, 1999 to which you had attached your letter of April 26, 1999 which was addressed to the Shawinigan-Sud Tax Centre. As you may be aware, on November 1, 1999, Revenue Canada became the Canada Customs and Revenue Agency (CCRA).
You have recently moved to Ottawa from the province of Quebec and you enquire as to whether there are any differences concerning the application of the Income Tax Act (the "Act"). You also asked to be informed of any tax laws surrounding your status.
Although these are very broad questions, we can comment that there are no differences as far as the application of the Act is concerned. However, there may be a difference in the tax base for provincial taxes as the calculation of provincial taxes in all the provinces except Quebec is based on federal taxes. It should be noted that while you had to file two income tax returns as a resident of the province of Quebec, one for the federal government and one for the province of Quebec, as a resident of the province of Ontario, you have only one tax return to file which covers both the federal and provincial income taxes. In addition, provinces generally have their own tax credits so there may be other provincial differences when you file your return.
As you may earn employment income, we are enclosing a copy of the Indian Act Exemption for Employment Income Guidelines which were issued by the CCRA in June 1994. These Guidelines apply to employment income earned in any province.
Section 87 of the Indian Act provides an exemption from taxation for certain types of property, including the personal property of an Indian or a band situated on a reserve. In relation to the Goods and Services Tax (GST) and the Harmonized Sales Tax, the Canada Customs and Revenue Agency (CCRA) has adopted a number of guidelines designed to provide the relief from taxation that is guaranteed under the Indian Act. Enclosed is a copy of Technical Information Bulletin B039R, GST Administrative Policy: Application of GST to Indians (T1B039R) (the "Bulletin") which provides extensive details on how the GST/HST applies to purchases made by the Indians. It is to be noted that, effective February 15, 1998, taxable goods and services acquired in the Yukon are subject to GST even where these supplies are acquired by Indian individuals.
Goods acquired on reserve, by an Indian individual, are relieved of GST/HST. Under departmental guidelines, goods acquired off reserve by an Indian are relieved of GST/HST if the goods are delivered to a reserve by the vendor or the vendor's agent. Furthermore, a service acquired by an Indian individual is relieved of GST/HST where the service is performed entirely on reserve.
As explained in TIB039R, in order for Indian individuals to acquire goods and services on a GST/HST relieved basis as described above, they must provide proof to the vendor that they are registered under the Indian Act. The CCRA will accept as proof of registration under the Indian Act the Certificate of Indian Status identification card. This card is issued by the Department of Indian Affairs and Northern Development.
In addition, it is the responsibility of the vendor to maintain appropriate documentary evidence that the sale was made to an Indian individual and, if necessary, that the goods were delivered to a reserve.
Any further questions which you may have concerning GST issues should be addressed to the following office:
Northern Ontario Technical Interpretation Services Centre
3rd Floor, 333 Laurier Avenue West
Ottawa, Ontario
K1A 0L9
Telephone (Business Window): (613) 957-8109; 1-800-959-5525
As for the application of the Ontario provincial sales tax, the following office should be contacted to obtain the pertinent information:
Retail Sales Tax Branch
Province of Ontario
100 Blair Place, 3rd Floor
Gloucester, Ontario
K1J 9B8
Telephone (general enquiry): (613) 746-9200
Fax: (613) 842-3593
We trust the above information will be of assistance to you. We would be pleased to address any further specific questions which you may have concerning an income tax issue.
Yours truly,
Roberta Albert, CA
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
Encl.
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