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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
What is the tax status of money earned in a XXXXXXXXXX from the operations.
Position: General Comments given
Reasons: Not enough information provided
Signed on October 21, 2002
XXXXXXXXXX
Dear Colleague:
I write in reply to your letter of January 28, 2002, concerning the taxation of money earned by a XXXXXXXXXX operated on land that is XXXXXXXXXX kilometres away from an existing reserve, a copy of which was forwarded to me by the Honourable Robert D. Nault, Minister of Indian Affairs and Northern Development, on April 22, 2002. I apologize for this delayed response.
Paragraph 81(1)(a) of the Income Tax Act and section 87 of the Indian Act provide a tax exemption for the personal property of an Indian or an Indian band situated on a reserve. Income earned by a XXXXXXXXXX owned and operated by an Indian or an Indian band on land that is XXXXXXXXXX kilometres away from a reserve will not qualify for the tax exemption because the income is not property situated on a reserve. In the event that the XXXXXXXXXX land is eventually added to a reserve, subsequent to that time, the income earned by the XXXXXXXXXX may become property situated on a reserve that is eligible for the tax exemption.
In most cases, XXXXXXXXXX are owned and operated by corporations. A corporation is not an Indian for purposes of the Indian Act. Consequently, a corporation will be taxable on its XXXXXXXXXX income unless otherwise exempt from taxation under another provision of the Income Tax Act.
I trust that the above information will be helpful.
Sincerely,
Elinor Caplan
C. Rystenbil
941-6547
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