| Graham Swan | |
| Director | |
| Land Directorate | 5-902541 |
| Lands and Environment | Bill Guglich |
| Indian and Northern Affairs Canada | (613) 957-2102 |
| Ottawa, Ontario | |
| K1A 0H4 |
October 12, 1990
Dear Mr. Swan:
This is in reply to your letter of September 20, 1990 concerning the income tax treatment of employment income earned by status Indians on designated land.
"Designated lands" is defined in subsection 2(1) of the Indian Act to mean "a tract of land or any interest therein the legal title to which remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has otherwise than absolutely released or surrendered its rights or interests, whether before or after the coming into force of this definition".
Please note that the release or transfer by the band must be conditional (otherwise than absolutely). If the release or surrender by the band is absolute or unconditional such land or any interest therein would not qualify as designated lands.
"Reserve" is defined in subsection 2(1) of the Indian Act to mean a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band, and for purposes of section 87 of the Indian Act includes designated land.
The Indian Remission Order as currently drafted provides for the remission of income tax payable in respect of employment income earned by status Indians working on a reserve. Consequently employment income earned by status Indians that is reasonably attributable to duties performed on designated land would qualify for remission of tax under the Indian remission Order.
At the present time we do not have any literature which deals with this matter.
We trust this will be of assistance to you.
Yours truly,
B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch