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: Indian employment income exemption
Position: Not exempt
Reasons: Duties off reserve; employer not resident on reserve
XXXXXXXXXX 2001-008876
M. Eisner, CA
August 31, 2001
Dear XXXXXXXXXX:
Re: Status Indian's Employment Income
This is in reply to your letter of June 5, 2001, concerning the above- noted subject.
In the circumstances of your situation, you were employed by XXXXXXXXXX.
You are a status Indian as defined in the Indian Act. You have indicated that if you work in an Indian community, your earnings are exempt. You have asked whether this would also be the case if you worked in an Inuit community.
Paragraph 81(1)(a) of the Income Tax Act exempts from tax those amounts declared exempt by another act of Parliament. Section 87 of the Indian Act provides that the personal property of an Indian situated on a reserve is exempt from taxation, and the courts have determined that employment income is considered personal property. A reserve is generally defined in section 2 of the Indian Act as a tract of land, the legal title to which is vested in Her Majesty, that has been set apart for the use and benefit of an Indian band. Also, subsection 4(1) of the Indian Act states that a reference to Indian does not include an Inuit.
The Canada Customs and Revenue Agency has issued the "Indian Act Exemption for Employment Income Guidelines" (the "Guidelines") to assist individuals to determine when their employment income would be considered exempt under the Indian Act. A copy of the Guidelines has been enclosed for your reference. You cannot meet any of the exemptions with respect to your above employment with XXXXXXXXXX because, inter alia, none of your employment duties were performed on a reserve and the employer does not reside on a reserve.
We trust that our comments are of assistance to you.
Yours truly,
Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings
Policy and Legislation Branch
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