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 7, 1994
Sudbury Tax Centre Head Office Sherry Drynan Rulings Directorate (613) 957-8953
Taxation of Pension Income Received by Indians
This is in reply to your Round Trip Memorandum of October 28, 1993 requesting our comments regarding the tax treatment of pension income received by Indians.
We understand the facts to be as follows:
XXXXXXXXXX
Our Comments:
Pension income is exempt from income tax if the employment income that gave rise to the pension income was itself exempt. We have not been given any facts as to when XXXXXXXXXX worked or when he retired, however, from the information provided it appears that the employment income earned by XXXXXXXXXX over the years was taxable. Accordingly, his pension income will be taxable.
The taxpayer's representative states in his submission that he was "given to understand that based on new internal directives issued, Revenue Canada will now accept XXXXXXXXXX claim to an exemption from taxation, ie. if employment duties are performed off a Reserve, but the Indian lives on a Reserve." This understanding is incorrect.
Employment income in such a scenario was never exempt nor do the "Indian Act Exemption for Employment Income Detailed Guidelines" which were issued on December 15, 1993 extend exemption in such circumstances.
We suggest that the enclosed copy of the guidelines be forwarded to the taxpayer's representative for his information.
R. Albert for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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