21 March 1994 Ministerial Letter 9402938 - EMPLOYMENT INCOME - STATUS INDIAN

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

ADM'S OFFICE (3) ADM 940131

RETURN TO RULINGS, ROOM 303, MET. BLDG.

AUTHOR
SUBJECT OR CORPORATE FILE
March 21, 1994

XXXXXXXXXX

Dear XXXXXXXXXX:

I am writing to you in response to your letter of January 20, 1994, wherein you concluded that your employment income is exempt from taxation.

You have stated that the employees of the XXXXXXXXXX have always maintained that their income is tax exempt by virtue of sections 87, 89 and 90 of the Indian Act. You feel that by virtue of the tuition agreement the funding of the school would fall within the wording of subsection 90(1) of the Indian Act. Alternatively, you have also referred to the guidelines issued by this department on December 15, 1993, and feel that since the XXXXXXXXXX has a sub-office located on the reserve in XXXXXXXXXX that this is the place where the central management and control of the XXXXXXXXXX is exercised.

The Department does not agree that the employees of the XXXXXXXXXX earn employment income which is exempt from taxation by virtue of the deeming provisions of section 90 of the Indian Act.

XXXXXXXXXX

As you know, draft guideline #2 requires the Indian to live on a reserve and the employer to be resident on the reserve. The determination of where the employer is resident is a question of fact, to be determined upon a review of all pertinent information. The Department considers that an employer is resident on a reserve if the reserve is the place where the central management and control over the business is actually located. The central management and control of an organization is considered to be exercised by the group that performs the function of a Board of Directors of the organization, in the case of a school division this would be a Board of Trustees, and may be exercised in a place other than the principal administrative office of the organization. Based on the limited information available, it would appear that the central management and control of the XXXXXXXXXX would be exercised at its Head Office or at the place where the Board of Trustees meet. In our view, this appears to be in Winnipeg and not on a reserve.

If you feel that there are significant changes to the facts pertaining to the XXXXXXXXXX or if you have any additional information that should be considered in your particular case, I would suggest you write to the Winnipeg District Taxation Office at the following address:

325 Broadway Avenue
Winnipeg, Manitoba
R3C 4T4

In closing, as indicated in my December 15, 1993, letter attached to the guidelines I welcome comments concerning them until March 31, 1994.

		Yours sincerely,

		Denis Lefebvre
		Assistant Deputy Minister
		Legislative & Intergovernmental
		  Affairs Branch

Bill Kerr
957-2139
March 11, 1994
940293