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.
Indian Act Tax Exemption: does the Federal Court of Appeal's decision to allow Mrs. Marianne Folster's appeal (Mrs. Folster was entitled to the exemption sought) change our opinion with respect to 970659.
The taxpayer's income, received form duties performed off a reserve would be subject to income tax.
The case of Marianne Folster was decided on its specific facts. In the Departments view, the impact of the decision is limited to identical objections or appeals and is not precedent setting.
XXXXXXXXXX Karen Power, CA
February 11, 1998
Re: Indian Act Income Tax Exemption
We are writing in response to your letter dated August 4, 1997, wherein you requested whether our opinion provided in file #970659 with respect to the facts of the situation that were outlined in your letter of February 27, 1997, would change in light of the recent Federal Court of Appeal decision in the F. Marianne Folster (97 DTC 5315) case.
In our view, the Folster case was decided in a manner specific to its unusual facts and circumstances. The impact of this decision will be limited to identical situations. As a result, this judgment cannot be relied upon in determining whether employment income, received by an Indian employee in other situations, is exempt from income tax.
In your situation, as neither the location of employment duties nor the residence of the employer is on a reserve, none of the guidelines in Revenue Canada's publication "Indian Act Exemption for Employment Income" have been met. Accordingly, in our view, the employment income in your situation is taxable.
We trust our comments will be of assistance to you.
Roberta Albert, CA
Business and Publications Division
Income Tax Rulings and
Policy and Legislation Branch
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