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.
January 28, 1993
Micheline Poirier Business and General
Chief Division
Correspondence Section W.P. Guglich
Assessment of Returns Directorate (613) 957-2102
930125
Pension Income Received by an Indian
This is in reply to your memorandum dated January 15, 1993 concerning the tax treatment of pension income received by XXXXXXXXXX (the "taxpayer") an Indian residing on a reserve.
We understand that
XXXXXXXXXX
The taxpayer claims exemption from income tax on the basis he is a status Indian residing on a reserve.
Our Views
The Taxation Programs Branch memorandum (the "TPB Memo") dated December 30, 1992 states at page 5 that if the employment income giving rise to the pension income or retiring allowance (severance pay) is exempt then the pension income or retiring allowance is tax exempt. It follows that if the employment income giving rise to the pension income or retiring allowance is not exempt then the pension income and retiring allowance would not be tax exempt.
The TPB Memo states at page 2:
- "Employment Income for duties performed entirely off a reserve is tax exempt if the employer resides on a reserve, and the Indian lives on a reserve."
Since the duties are performed entirely off a reserve and the employer does not reside on a reserve the employment income would not be exempt. Therefore the pension income and the severance pay would also not be exempt.
We trust our comments will be of assistance. E. Wheeler for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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