2017-0695891M4 Taxation of XXXXXXXXXX Nation individuals

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.

Principal Issues: Are XXXXXXXXXX Nation individuals required to pay taxes under the Income Tax Act?

Position: Please see the response.

Author: Mahendran, Ananthy
Section: 2(1) & 81(1)(a) of the Income Tax Act and 2(1) and 87(1)(b) of the Indian Act

XXXXXXXXXX

Dear XXXXXXXXXX:

Thank you for your correspondence about the taxation of XXXXXXXXXX Nation individuals. Thank you also for your understanding regarding the delay of this response.

Canada taxes individuals, including Indigenous individuals, on their income, based on their residency. Subsection 2(1) of the Income Tax Act states that an income tax shall be paid, as required by that Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year. Accordingly, if an individual is resident in Canada, then the individual is taxable in Canada on all of his or her worldwide income. Generally, Indigenous individuals pay taxes and are taxed in the same way as all other Canadian residents, except when the tax exemption provided in the Indian Act applies.

Paragraph 87(1)(b) of the Indian Act states that the personal property of an Indian or a band is exempt from tax if the property, which includes income, is situated on a reserve. For the purposes of the exemption, an Indian is defined in subsection 2(1) of the Indian Act as a person who is registered as an Indian or is entitled to be registered as an Indian. Income is only exempt from tax under the Indian Act if it is found to be situated on a reserve.

Thank you for bringing this matter to my attention. I trust the information I have provided is helpful.

Sincerely,

 

The Honourable Diane Lebouthillier
Minister of National Revenue

 

Prepared by:
Ananthy Mahendran
905-721-5204
#2017-069589

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 the prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5.

© Her Majesty the Queen in Right of Canada, 2017

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 redistribuer de l'information, sous quelque forme ou par quelque moyen que ce soit, de façon électronique, mécanique, 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, 2017


Video Tax News is a proud commercial publisher of Canada Revenue Agency's Technical Interpretations. To support you, our valued clients and your network of entrepreneurial, small businesses, we choose to offer this valuable resource to Canadian tax professionals free of charge.

For additional commentary on Technical Interpretations, court cases, government releases, and conference materials in a single practical document specifically geared toward owner-managed businesses see the Video Tax News Monthly Tax Update newsletter. This effective summary and flagging tool is the most efficient way to ensure that you, your firm, and your clients are fully supported and armed for whatever challenges are thrown your way. Packages start at $400/year.