16 June 1989 Ruling 58093 F - Indians

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.

June 16, 1989

19(1)

This is in reply to your letter of May 10, 1989, in which you claim exemption from withholding taxes by virtue of the decision in the Nowegijick case, 83 DTC 5041.

The Supreme Court of Canada in the Nowegijick case held that an Indian is not required to pay tax on income earned from a corporation with its head office on a reserve, and while he is living on the reserve.  In the Nowegijick case, salary that was earned from an employer resident on the reserve was held to be his personal property situated on a reserve and thus exempt from taxation by virtue of section 87 of the Indian Act.

It is our understanding that your remuneration, which is paid by the Federal Government, is mailed to your address on the reserve. As has been decided earlier, the situs of the Federal Government as payer of a salary debt is in Ottawa and not on the reserve. Thus, the facts in your present situation do not parallel those in the Nowegijick case and it would appear that your remuneration from the Federal Government is not tax exempt.

We trust our reply will prove helpful.

Yours truly,

for Director Small Business and General DivisionSpecialty Rulings Directorate Legislative and Intergovernmental Affairs Branch

c.c.     Miss Diane DinelleHead Pay AdministrationPersonnel Service, N.C.R.Indian and Northern Affairs10 Wellington StreetHull, Quebec, K1A 0H4