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.
19(1) 920425
Glen Thornley
(613) 957-2101
April 9, 1992
Dear 19(1)
Re: Income of Status Indians
This is in reply to your letter of January 2, 1992 addressed to the Ottawa District Taxation Office that was sent to us for reply.
19(1)
Our Comments
Status Indians are exempt from income taxes on employment income received from an employer situated on a reserve by virtue of the Indian Act and those Indians performing services on a reserve who are employed by employers situated off a reserve are entitled to a remission of any taxes paid on such employment income by virtue of the Indian Remission Order. The Remission Order was recently extended to cover the 1990 taxation year and it is expected that it will be further extended to cover the 1991 and 1992 taxation years.
Business income, on the other hand, is attributable or allocable to a permanent establishment. For example, as set out in Interpretation Bulletin IT-62, for a self-employed merchant it would be at his store.
19(1)
Whether or not you are an employee is a question of fact to be determined, in most cases, by personnel from a District Taxation Office.
As indicated, the Department's position in the matter is contained in IT-62, a copy of which is attached for your information. The information regarding self-employed persons is the existing policy of the Department. Some of the other information cannot be depended on, however, due to decisions in Court cases such as Nowegijick v. the Queen el al 83 DTC 5041 where it was decided that Mr. Nowegijick's wages were exempt from income taxes because his employer, a logging company, was resident on the reserve and that is where his pay cheque was prepared and paid even though Mr. Nowegijick, himself, was working off the reserve.
Finally, we bring to your attention, the November 23, 1990 case of Jacob
Pete v. Minister of National Revenue in which it was held that Mr. Pete's
consulting income from clients situated on a reserve constituted the personal property of an Indian situated on a reserve and thus was exempt from taxation. However, this Tax Court of Canada decision is under appeal to a higher court. Until a higher court considers the decision in the Pete case, comments in IT-62 with respect to self-employment income of a status Indian continue to reflect the Department's position.
We trust our comments will be of assistance to you.
Yours truly,
E. Wheelerfor DirectorBusiness and General DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch
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, 1992
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, 1992
Email this Content