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.
5-940498
XXXXXXXXXX C. Chouinard
Attention:XXXXXXXXXX
March 3, 1994
Dear Sir:
Re: Taxation of Employment Income of Status Indian
We are writing in reply to your enquiry concerning the formula to be used in determining the tax-exempt portion of employment income earned by a status Indian who worked 35 days on a reserve during 1993.
According to the Indian Act Exemption for Employment Income Detailed Guidelines, a copy of which is enclosed, where the employment duties are performed both on and off a reserve, the employment income is to be prorated between the duties performed on a reserve and those performed off reserve, with the exemption applying to the portion of the income related to the duties performed on the reserve, unless 90% or more of the employment duties were performed off-reserve, in which case the whole of the employment income is taxable.
In prorating the employment income to determine the tax-exempt portion, vacation leave and statutory holidays can be taken into consideration in the pro-rating formula. In the situation you describe, the tax-exempt portion of the employment income will be that portion of the employment income that the number of days worked on the reserve is of the days actually worked, namely, 35/237 of the employment income.
In this manner, a proportionate share of paid leave is included in the tax exempt income calculation and it does not matter whether the leave was taken on or off the reserve.
We trust that these comments will be of assistance.
Yours truly,
R. Albert
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
Encl.
cc. Rick Owen
.
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, 1994
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, 1994
Email this Content