2021-0893701E5 Indian Act Tax Exemption & Moors

Principal Issues: Is the income earned by an individual, who identifies as a member of the Moorish Americans, exempt from tax?

Position: No.

Reasons: Paragraph 81(1)(a) of the Income Tax Act and section 87 of the Indian Act provide an income tax exemption for individuals who are registered or entitled to registered under the Indian Act and whose income is situated on a reserve.

Author: Gauthier, Michel
Section: Indian Act s.87; 81(1)(a)

XXXXXXXXXX                                                                M. Gauthier
                                                                                        2021-089370



February 24, 2022

Dear XXXXXXXXXX:

Re: Taxation of Moorish Americans

This is in reply to your email dated May 6, 2021, asking about the taxation of Moorish Americans resident in Canada.

Our Comments

This technical interpretation provides general comments about the provisions of the Income Tax Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC70-6R11, Advance Income Tax Rulings and Technical Interpretations.

Under the Canadian income tax system, an individual's liability for income tax is based on his or her status as a resident or a non-resident of Canada. An individual who is resident in Canada during a tax year is subject to Canadian income tax on his or her worldwide income from all sources. Generally, a non-resident individual is only subject to Canadian income tax on income from sources inside Canada.

Indigenous individuals generally pay taxes under the same tax laws as all other Canadian residents, except where the income tax exemption provided under paragraph 81(1)(a) of the Income Tax Act and section 87 of the Indian Act applies. Section 87 of the Indian Act exempts from tax the personal property situated on a reserve of an individual who is registered or entitled to be registered under the Indian Act. The Canadian courts have determined that personal property includes income.

Crown-Indigenous Relations and Northern Affairs Canada is responsible for registering individuals under the Indian Act and they confirmed that an individual who identifies as a Moors (or Moorish American) is not entitled to be registered under the Indian Act.

Based on the information you provided, you do not appear to be entitled to be registered under the Indian Act and as such, you do not qualify for the tax exemption under paragraph 81(1)(a) of the Income Tax Act and section 87 of the Indian Act. As with all individuals who are resident in Canada during a tax year, you are subject to Canadian income tax on your worldwide income from all sources.

We trust that these comments will be of assistance.

Yours truly,



Ms. Nerill Thomas-Wilkinson, CPA, CA
Manager
Non-Profit Organizations and Indigenous Issues Section
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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, 2022

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, 2022