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.
March 16, 2001
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your letter concerning the tax treatment of status Indians. The Honourable Paul Martin, Minister of Finance, sent a copy of your letter to Mr. Cauchon on February 13, 2001.
The confidentiality provisions of the Income Tax Act prevent me from discussing information on specific taxpayers without their written authorization. However, I have forwarded a copy of your letter to our Audit Directorate for their consideration. I can also provide the following general comments.
Under paragraph 81(1)(a) of the Income Tax Act and section 87 of the Indian Act, an Indian's personal property situated on a reserve is exempted from tax. The courts have previously determined that, for purposes of section 87 of the Indian Act, the reference to personal property includes employment income. In the 1992 case of Williams vs The Queen, the Supreme Court of Canada reconsidered the approach to use in determining whether income is situated on a reserve. The Court stated that the proper approach in determining the situs of personal property is to evaluate the various connecting factors that tie the property to one location or another.
Based on the guidance provided in the Williams case and after receiving representations from interested Indian groups and individuals, the Canada Customs and Revenue Agency (CCRA) identified connecting factors that can be used to determine whether employment income is situated on a reserve. To assist the Indian cornrnunity, the CCRA developed the Indian Act Exemption for Employment Income Guidelines, incorporating the various connecting factors that describe the employment situations covered by the Indian Act. I have attached a copy of the guidelines. For employment income earned by a status Indian to be exempt, the income should fall within the above-mentioned guidelines.
I appreciate being made aware of your concerns.
Yours sincerely,
Bill McCloskey
Assistant Commissioner
Policy and Legislation Branch
Attachment
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, 2001
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, 2001
Email this Content