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 employment income earned by status Indian employed by federal government is exempt from tax where a portion of the employee's duties are performed on a reserve.
Position TAKEN:
Cannot determine from information provided what portion of the duties are performed on reserves.
Reasons FOR POSITION TAKEN:
Nebulous statement made by employer.
Environment Canada
Regional Personnel Office
P.O. Box 5050
867 Lakeshore Road 5-942140
Burlington, Ontario C. Chouinard
L7R 4A6
Attention: Ms. Joanne Rosinski
October 17, 1994
Dear Ms. Rosinski:
Re: Taxation of Employment Income Received by a Status Indian
We are writing in response to your letter of August 16, 1994, wherein you asked us to confirm that the employment income earned by XXXXXXXXXX a status Indian employed by Environment Canada, is exempt from tax.
According to the information we have on file, 75% of XXXXXXXXXX duties are performed "directly on Reserves of XXXXXXXXXX or is conducted for the benefit of, and/or in concert with XXXXXXXXXX Reserves".
In June, 1994, after receiving representations from interested Indian groups and individuals, the Department issued the Indian Act Exemption for Employment Income Guidelines (the "Guidelines"), a copy of which is enclosed. The Guidelines provide that, where, as in this situation, employment income is earned partially on and partially off a reserve for an off-reserve employer, the employment income is to be prorated between the duties performed on-reserve and the duties performed off the reserve, with the exemption applying to the on-reserve portion. If, however, more than 50% of the duties of employment of the Indian are performed on a reserve and the Indian lives on a reserve, all of the Indian's income from employment will be exempt from income tax.
As we indicated in our October 19, 1993 letter, the information you provided in support of XXXXXXXXXX claim for tax exemption does not indicate what portion of her duties are performed on and off a reserve. Duties performed off reserve for Environment Canada that are conducted for the benefit of, and/or in concert with, XXXXXXXXXX Reserves, do not qualify for exemption. Although we understand from the above-mentioned statement that a certain portion of XXXXXXXXXX duties are performed on reserves, since the statement is in respect of both on and off reserve duties, we cannot determine what proportion of her employment duties are performed on a reserve and thus, what portion of her employment income is exempt from tax.
We trust that these comments will be of assistance.
Yours truly,
R. Albert
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
Encl.
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