23 September 1993 Internal T.I. 9324557 F - Indians Employment Income at Off-Reserve Site

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.

SURREY TAXATION CENTRE Business and General Mr. D.M. Luciuk, Director Division 

Attention:  C. Fraser (613) 957-2101 S41-32

XXXXXXXXXX

This is in reply to your Round Trip Memorandum of August 20, 1993 requesting a determination of the exempt tax status of the above noted status Indian's 1990 employment income.

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Our Comments:

In 1990 the Department was operating under the rules adopted as a result of decision reached in the Nowegijick case, 83 DTC 5041. It was held in that case that an Indian is not required to pay tax on income earned from a corporation with its head office on a reserve, even though he performs his employment duties in an off-reserve location. In 1990 XXXXXXXXXX employer apparently had its head office on a reserve, and XXXXXXXXXX lived on a reserve. Thus, he appears to have met the minimum requirement in 1990.

Residency, however, is a question of fact and if you feel the situation warrants it, you may wish to confirm the employer's existence on the reserve during the time in question. In this respect the courts have established that the residence of a corporate employer is the place where the employer exercises control and management. Factors to be considered would include the location of the books and records, where the Directors meet, where day-to-day management and control is exercised, where major business transactions are carried out, where employees report for work or are hired or are paid from, and where one would sue if legal action were being contemplated.

If the head office of XXXXXXXXXX employer met most of the criteria set out above in 1990 it will likely be considered that control and management was exercised there and that the business was in fact resident on a reserve. If this is the case, as indicated earlier, XXXXXXXXXX employment income for 1990 will be exempt.

If for some reason the employer did not meet the above criteria, XXXXXXXXXX 1990 employment income would not have been exempt and therefore should have been taxable.

R. Albert

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c. Rick Owen