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.
| |
June 1, 1989 |
| TO - VICTORIA DISTRICT OFFICE |
Specialty Rulings |
| D.K. Watson |
Directorate |
| Chief of Verification and Collections |
G. Thornley |
| |
(613) 957-2101 |
| |
File No. 3-2475 |
SUBJECT: 19(1)
We are enclosing an advance income tax ruling request on behalf of the above from 19(1). Also enclosed is our letter of reply in which we advise 19(1) that we are unable to rule on completed transactions and thus are unable to issue the requested ruling.
As indicated in our letter we also advised that, as the other issues were payroll matters, we were forwarding the request for a ruling on to you for consideration.
As far as the obligation to deduct and remit income tax from the salaries and wages of Indians who are exempt from such tax is concerned, it is our understanding that employers of Indians who are tax exempt are not required to deduct and remit such income taxes. See Verification and Collections Branch Directive CA-87-44 dated June 19, 1987.
With respect to the taxability of those Indians working for the Council 19(1) , we have generally considered such Indians to not be taxable on their income earned from an employer residing on a reserve in the circumstances of Nowegijick (83 DTC 5041). However in the recent case of Kahn - Tineta Horn v. MNR, 89 DTC 147 Lamarre - Proulx, T.C.J. quotes from the December 15, 1988 case of William v. The Queen (presently under appeal). In that case Mr. Justice Cullen says: "there is also an argument to be made that the residence of the employer is not the only factor to be considered in determining situs of income". He further states, "however, I do think that the place where the benefits are paid to the plaintiff should be a consideration when assessing the situs for the benefits, based on Dickson, J.'s comments in Nowegijick". You may wish to consider these comments when making your determination of whether salaries paid to Indian employees of the Council in 19(1) are taxable.
E.M. Wheeler for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
c.c. J.C. LaporteSource Deductions Division
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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