First Nations Tax Issues
- What is the First Nations Tax (FNT)?
- What products are subject to the First Nations Tax (FNT)?
- How and when do I have to report the First Nations Tax (FNT) to the Canada Revenue Agency?
- Are members of the First Nations people subject to the same tax obligations as other Canadian taxpayers?
- How can I be given tax benefits as an “Indian” as defined by the Canada Revenue Agency?
- What is the general contact information for the Department of Indian Affairs and Northern Development (DIAND)?
- What is the First Nations Tax (FNT)?
-
The Canada Revenue Agency defines the First Nations Tax (FNT), sometimes referred by some as a “community improvement fee”, as a tax imposed on a specific selection of items on various First Nations reserves. This tax has not been enacted on all reserves and it only applies to listed alcohol, tobacco and fuel products that are set by each separate band council. The tax rate is 5% and the CRA is responsible for executing this tax for the First Nations
The First Nations band councils that have imposed the FNT are as follows:
- Westbank, British Columbia
- Tk’emlúps te Secwépemc (used to be known as Kamloops), British Columbia
- Sliammon, British Columbia
- Stz’uminus First Nation (used to be known as Chemainus), British Columbia
- Adams Lake, British Columbia
- Tzeachten, British Columbia
- Cowichan, British Columbia
- Little Shuswap Lake, British Columbia
It is important to note that although the Buffalo Point band council in Manitoba used to impose the First Nations Tax, they no longer apply it (as of October 3, 2011).
The above band councils impose the FNT on alcoholic beverages, fuel and tobacco products with the exception of Sliammon, which only taxes fuel and tobacco products and not alcohol.
The Canada Revenue Agency has published a guide to the First Nations Tax (FNT) which can be accessed HERE.
- What products are subject to the First Nations Tax (FNT)?
-
Items that are subject to FNT are alcohol, fuel and/or tobacco products. Each band council has the option to vote into their bylaws the First Nations Tax and it does not need to impose this tax on all of the above outlined products.
The Canada Revenue Agency has published a guide to the First Nations Tax, which can be found HERE.
- How and when do I have to report the First Nations Tax (FNT) to the Canada Revenue Agency?
-
The FNT must be reported to the CRA along with the GST/HST. So instead of just listing the GST/HST amount, you will need to add the FNT amount to the total.
The Canada Revenue Agency requires the form, GST499-1 First Nations Tax (FNT) Schedule, to be filled out for every reporting period along with the GST/HST tax return, if the reserve where you sell the listed items imposes the First Nations Tax.
- Are members of the First Nations people subject to the same tax obligations as other Canadian taxpayers?
-
In some cases, members of the First Nations people are not obliged to pay the same amount of taxes as other Canadian taxpayers. The major determining factor is whether or not earnings were made ON a First Nations reserve.
According to section 87 of the Indian Act and paragraph 81(1)(a) of the Income Tax Act, earnings made on a reserve do not need to be reported on your annual income tax return, in addition to products purchased on or delivered to a reserve.
It is important to note that some First Nations groups have a unique tax agreement with the government of Canada or have a self-governing agreement with the government of Canada whereby the information listed above may not apply to your particular circumstance. Contact your First Nations government in order to find out if this applies to you or call the Canada Revenue Agency at 1-800-959-8281.
In addition, personal property and income located on a reserve are also tax exempt according to section 87 of the Indian Act.
For more information about tax obligations by the First Nations people, the CRA has published a web page called, Information for Indians, which can be accessed HERE. Also, there is another web page on the Canada Revenue Agency website that may be helpful: Indian Act Exemption for Employment Income Guidelines
- How can I be given tax benefits as an “Indian” as defined by the Canada Revenue Agency?
-
According to the Indian Act, the CRA recognizes an “Indian” as anyone registered or able to be registered as an Indian in the Indian Register. Consequently, in order to be given these tax benefits, Indian and Northern Affairs Canada must confirm said identity.
- What is the general contact information for the Department of Indian Affairs and Northern Development (DIAND)?
-
The website address for the Department of Indian Affairs and Northern Development is www.aadnc-aandc.gc.ca/
The mailing addresses and general telephone numbers for the Department of Indian Affairs and Northern Development (DIAND) are as follows:
Alberta:
630 Canada Place
9700 Jasper Avenue
Edmonton, Alberta T5J 4G2
Telephone: (780) 495-2773Atlantic Region:
40 Havelock Street
P.O. Box 160
Amherst, Nova Scotia B4H 3Z3
Telephone: (902) 661-6200British Columbia:
1138 Melville Street, Suite 600
Vancouver, British Columbia
V6E 4S3
Telephone: (604) 775-5100Manitoba:
365 Hargrave Street
Room 200
Winnipeg, Manitoba
Telephone: (204) 983-2842Northwest Territories:
P.O. Box 1500
Yellowknife, Northwest Territories P.O. Box 2200
X1A 2R3
Telephone: (867) 669-2500Nunavut:
1084 Aeroplex Building
Iqaluit, Nunavut X0A 0H0
Telephone: (867) 979-1605Ontario:
25 St. Clair Avenue East
9th Floor
Toronto, Ontario M4T 1M2
Telephone: (416) 973-6234Quebec:
320 St-Joseph Street East
P.O. Box 51127, Postal Outlet G. Roy
Québec, Quebec G1K 8Z7
Telephone: (418) 648-7551 or toll-free 1-800-263-5592Saskatchewan:
2221 Cornwall Street
Regina, Saskatchewan S4P 4M2
Telephone: (306) 780-5945Yukon:
300 Main Street
Room 345
Whitehorse, Yukon Y1A 2B5
Telephone: (867) 667-3100
