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Canada: Tax relief for First Nations, indigenous taxpayers extended to 30 June 2021 (COVID-19)

Canada: Relief for First Nations, indigenous taxpayers

The Canada Revenue Agency (CRA) is extending tax relief for First Nations and indigenous taxpayers in response to coronavirus (COVID-19) pandemic-related restrictions that may temporarily cause employees or employers to work or reside “off-reserve.”

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The relief has been extended through 30 June 2021 (from 31 December 2020).

In general, the employment income of indigenous persons is exempt from income tax if the income is “situated on a reserve.” Under administrative guidelines for determining whether employment income is situated on a reserve, and therefore exempt from tax, certain conditions must be satisfied (such as a percentage of employment duties are performed on a reserve).

  • An employee is considered to live on a reserve if the principal place of residence and the center of the daily routine is on a reserve.
  • An employer that has an established office on a reserve is generally considered to reside on a reserve only if its central management and control is located on a reserve throughout the year. One of the key factors in this determination is the location where the meetings of the board of directors take place (although this is not the only factor).

The CRA originally granted relief from 16 March 2020 through 31 December 2020. Read TaxNewsFlash

Read a January 2021 report prepared by the KPMG member firm in Canada

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