26 August 1994 External T.I. 9413005 - INDIAN ACT EXEMPTION

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.

Principal Issues:

WHETHER INDIAN EMPLOYED BY AN EDUCATION AUTHORITY SITUATED ON RESERVE EXEMPT?

Position TAKEN:

YES PROVIDED ALL CONDITIONS IN GUIDELINE # 4 ARE MET.

Reasons FOR POSITION TAKEN:

QUESTION OF FACT WHETHER ALL THE CONDITIONS ARE MET. INFORMATION INSUFFICIENT TO DETERMINE.

		941300
XXXXXXXXXX	W.P. Guglich

Attention: XXXXXXXXXX

August 26, 1994

Dear Sirs:

Re: The Indian Act Tax Exemption - Your File: XXXXXXXXXX

This is in reply to your letter of May 17, 1994 concerning the application of the Indian Act tax exemption for an employee of the XXXXXXXXXX Education Authority.

The facts as we understand them are as follows:

1.Your clients, Indian bands, are currently entering into negotiations with respect to the hiring of an employee to provide counselling and liaison services to Indian students from XXXXXXXXXX in attendance at a high school located adjacent to the reserves in the Town of XXXXXXXXXX.

2.The employee is a treaty Indian and member of an Indian band.

3.The employee will be retained under direct contract of employment with the XXXXXXXXXX Education Authority, an organization operated and controlled by XXXXXXXXXX an "Indian Band" as defined pursuant to the provisions of "The Indian Act".

4.The employee will be paid by the XXXXXXXXXX Education Authority.

5.The employee's job duties will essentially involve the providing of counselling and liaison services to Indian students from XXXXXXXXXX reserves in attendance at the XXXXXXXXXX School. In this regard the majority of the employee's duties will be performed directly at the XXXXXXXXXX School.

6.At present the employee resides in the Town of XXXXXXXXXX It is anticipated that the employee will continue to reside in the town of XXXXXXXXXX throughout the term of her employment.

It is your view that the proposed employment arrangement would fall within guideline 4 of Revenue Canada's "INDIAN ACT EXEMPTION FOR EMPLOYMENT INCOME GUIDELINES" issued June 1994.

It appears that the interpretation you seek relates to a proposed transaction to be undertaken by a specific taxpayer and, therefore, we bring to your attention Information Circular 70-6R2 dated September 28, 1990 issued by Revenue Canada, Taxation. Confirmation with respect to proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. If you wish to obtain an advance income tax ruling for a particular taxpayer with respect to specific transactions which are contemplated, a written request for an advance income tax ruling can be submitted in accordance with the Information Circular. Nevertheless, we can offer the following general comments.

OUR COMMENTS

Provided that the XXXXXXXXXX Education Authority is resident on the reserve and it is an organization dedicated exclusively to the social, cultural, educational, or economic development of Indians who for the most part live on reserves, we agree with your views that the proposed employment arrangement would fall within guideline 4 of our "INDIAN ACT EXEMPTION FOR EMPLOYMENT INCOME GUIDELINES" issued June 1994. We were not provided with the information necessary to conclusively resolve these questions of fact.

In accordance with paragraph 21 of Information Circular 70-6R2, the above comments are not advance rulings and are not binding on the Department.

Yours truly,

for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch