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 940425
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SUBJECT OR CORPORATE FILE
June 27, 1994
XXXXXXXXXX
Dear XXXXXXXXXX:
Thank you for your letter of June 3, 1994, wherein you clarified the suggestion in your previous letter of April 12, 1994, concerning an amendment to Guideline 4 of the draft "INDIAN ACT EXEMPTION FOR EMPLOYMENT INCOME DETAILED GUIDELINES" (the "Guidelines"). Our meeting on June 2, 1994, to discuss your views was helpful.
You have now stated that draft Guideline 4 should remain as it is but the definition of when an "employer is resident on a reserve" should be extended to cover a situation where the members of the Board of Directors are themselves all residents on reserve, regardless of where the Board of Directors actually meet, provided all other conditions as set out in Guideline 4 are met.
As stated in my letter to you of June 2, 1994, the Department's position on when an "employer is resident on a reserve" is based on the decision of the House of Lords in the case of De Beers Consolidated Mines Ltd. v. Howe (1906) A.C. 455. To reiterate Lord Lorebrun's comments at page 458 "...A company resides where its real business is carried on...and the real business is carried on where the central management and control actually abides...This is a pure question of fact to be determined...upon a scrutiny of the course of business and trading".
We have not yet completed our deliberations on your suggestion. However, I do note that it would be necessary to ignore the well established principle in De Beers to accept that the residence of the members of the Board of Directors of an employer should be the determining factor in resolving the issue of where an organization resides.
Once again, thank you for your comments. We intend to finalize the guidelines on employment income this month and we will forward a copy to you.
Yours sincerely,
Denis Lefebvre
Assistant Deputy Minister
Legislative and Intergovernmental
Affairs Branch
c.c. Mr. J. Purda
Director
Winnipeg District Office
Bill Kerr
957-2139
June 23, 1994
941581
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