Taxation

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Contents Taxation	Overview This chapter explains core elements of the taxation relationship between the Nisga’a Nation, Canada and British Columbia, including: > The primary taxation powers of Nisga’a Lisims Government; > How Nisga’a Lisims Government can obtain further taxation powers; > How and when the current tax exemption under section 87 of the Indian Act will end; > A number of tax exemptions of Nisga’a Government. A number of further tax exemptions of Nisga’a Government and other Nisga’a bodies are explained in the Taxation Agreement, which is summarized below. What taxation power does Nisga’a Lisims Government have under the Treaty? Nisga’a Lisims Government can make direct taxation laws that apply to Nisga’a citizens on Nisga’a Lands. The power of “direct taxation” is the same power of taxation as British Columbia has. Nisga’a Government will only be able to tax persons who are not Nisga’a citizens on Nisga’a Lands if Canada or British Columbia delegates taxation power over those other persons to a Nisga’a Government, at a future time. When will section 87 of the Indian Act cease to apply to Nisga’a citizens? Section 87 will cease to apply to Nisga’a citizens in two stages: For “transaction taxes” (such as provincial sales tax), it will cease to apply eight years after the effective date of the Treaty. For all other taxes (such as income tax), it will cease to apply 12 years after the effective date. Will section 87 be continued on any Nisga’a Lands, until the eight- and 12-year periods? Yes. Canada and the Province will pass remission orders that will result in the former Indian reserve lands, within Nisga’a Lands, being treated as reserve lands for the purposes of section 87, until the eight- and twelve-year periods. Are there tax exemptions in the Treaty? Yes. The Nisga’a Nation and Nisga’a Villages are exempt from capital taxation (including property taxes) on Nisga’a Lands that do not have buildings (or other improvements) on them, and on Nisga’a Lands that have certain kinds of buildings (or improvements) on them. Also, transfers of Nisga’a capital are exempt from taxation. “Nisga’a capital” means all land, cash, and other assets transferred to, or recognized as owned by, the Nisga’a Nation or a Nisga’a Village under the Treaty. It does not include any land added to Nisga’a Lands after the effective date. Does the Treaty require a Taxation Agreement between the Nisga’a Nation, Canada and British Columbia? Yes. Is the Taxation Agreement itself part of the Treaty? No. Has the Taxation Agreement already been negotiated? Yes. It will come into effect on the effective date of the Treaty and is summarized below. Taxation Agreement Overview The Taxation Agreement explains certain tax exemptions that will apply to the Nisga’a Nation and Nisga’a Villages. What tax exemptions are covered in the Taxation Agreement? They include the following: > Deemed Public Bodies. The Nisga’a Nation and each Nisga’a Village will receive the same exemption from income tax under the Income Tax Act as municipalities receive, and their corporations will receive the same exemption from income tax under the Income Tax Act as corporations owned by municipalities receive. > Federal Goods and Services Tax. The Nisga’a Nation, Nisga’a Villages and certain bodies established by them will be entitled to receive a refund of federal goods and services tax paid, in certain circumstances. > Provincial Sales Tax and Motor Fuel Tax. The Nisga’a Nation, Nisga’a Villages, and certain bodies established by them will be entitled to receive a refund of provincial sales tax or motor fuel tax paid, in certain circumstances. > Property Transfer Tax. If a parcel of Nisga’a Lands is registered in the provincial land title system, the Nisga’a Nation and Nisga’a Villages will be exempt from taxes that would normally apply under the provincial Property Transfer Tax Act. > Mineral Resource Taxes. Persons are exempt from tax under the provincial Mineral Tax Act, Mining Tax Act and Petroleum and Natural Gas Act, on certain revenues connected to Nisga’a Lands. > Real Property Taxation. The Nisga’a Nation and Nisga’a Villages will not be subject to property tax on Nisga’a Fee Simple Lands, while those lands are used only for government activities or non-profit activities. > Nisga’a Settlement Trusts. A Nisga’a settlement trust, beneficial interests in the trust, and amounts distributed from the trust to a beneficiary (other than a Nisga’a citizen) are generally not taxable, except for goods and services tax. > Gifts To The Nisga’a Nation or a Nisga’a Village. Persons who make gifts to the Nisga’a Nation or a Nisga’a Village will receive the same tax benefit that they would if they made the gift to a registered charity. > Cultural Property and Import Act. The Nisga’a Nation (and any non-profit organization it establishes to receive, store and display cultural artifacts) will be treated as an institute “designated” under the Cultural Property Export and Import Act, under certain circumstances. This will allow a person who contributes cultural artifacts to the Nisga’a Nation (or the organization) to receive tax benefits under the Income Tax Act. How long does the Taxation Agreement last? Twelve years. However, it will continue in effect after that time unless one of the Parties to the Treaty provides notice to the other Parties to end the Agreement. In that case, the Parties will attempt to negotiate a further Taxation Agreement.

Contents

Taxation

Overview

This chapter explains core elements of the taxation relationship between the Nisga’a Nation, Canada and British Columbia, including:

> The primary taxation powers of Nisga’a Lisims Government;

> How Nisga’a Lisims Government can obtain further taxation powers;

> How and when the current tax exemption under section 87 of the Indian Act will end;

> A number of tax exemptions of Nisga’a Government.

A number of further tax exemptions of Nisga’a Government and other Nisga’a bodies are explained in the Taxation Agreement, which is summarized below.

What taxation power does Nisga’a Lisims Government have under the Treaty?

Nisga’a Lisims Government can make direct taxation laws that apply to Nisga’a citizens on Nisga’a Lands. The power of “direct taxation” is the same power of taxation as British Columbia has.

Nisga’a Government will only be able to tax persons who are not Nisga’a citizens on Nisga’a Lands if Canada or British Columbia delegates taxation power over those other persons to a Nisga’a Government, at a future time.

When will section 87 of the Indian Act cease to apply to Nisga’a citizens?

Section 87 will cease to apply to Nisga’a citizens in two stages:

For “transaction taxes” (such as provincial sales tax), it will cease to apply eight years after the effective date of the Treaty. For all other taxes (such as income tax), it will cease to apply 12 years after the effective date.

Will section 87 be continued on any Nisga’a Lands, until the eight- and 12-year periods?

Yes. Canada and the Province will pass remission orders that will result in the former Indian reserve lands, within Nisga’a Lands, being treated as reserve lands for the purposes of section 87, until the eight- and twelve-year periods.

Are there tax exemptions in the Treaty?

Yes. The Nisga’a Nation and Nisga’a Villages are exempt from capital taxation (including property taxes) on Nisga’a Lands that do not have buildings (or other improvements) on them, and on Nisga’a Lands that have certain kinds of buildings (or improvements) on them.

Also, transfers of Nisga’a capital are exempt from taxation. “Nisga’a capital” means all land, cash, and other assets transferred to, or recognized as owned by, the Nisga’a Nation or a Nisga’a Village under the Treaty. It does not include any land added to Nisga’a Lands after the effective date.

Does the Treaty require a Taxation Agreement between the Nisga’a Nation, Canada and British Columbia?

Yes.

Is the Taxation Agreement itself part of the Treaty?

No.

Has the Taxation Agreement already been negotiated?

Yes. It will come into effect on the effective date of the Treaty and is summarized below.

Taxation Agreement

Overview

The Taxation Agreement explains certain tax exemptions that will apply to the Nisga’a Nation and Nisga’a Villages.

What tax exemptions are covered in the Taxation Agreement?

They include the following:

> Deemed Public Bodies. The Nisga’a Nation and each Nisga’a Village will receive the same exemption from income tax under the Income Tax Act as municipalities receive, and their corporations will receive the same exemption from income tax under the Income Tax Act as corporations owned by municipalities receive.

> Federal Goods and Services Tax. The Nisga’a Nation, Nisga’a Villages and certain bodies established by them will be entitled to receive a refund of federal goods and services tax paid, in certain circumstances.

> Provincial Sales Tax and Motor Fuel Tax. The Nisga’a Nation, Nisga’a Villages, and certain bodies established by them will be entitled to receive a refund of provincial sales tax or motor fuel tax paid, in certain circumstances.

> Property Transfer Tax. If a parcel of Nisga’a Lands is registered in the provincial land title system, the Nisga’a Nation and Nisga’a Villages will be exempt from taxes that would normally apply under the provincial Property Transfer Tax Act.

> Mineral Resource Taxes. Persons are exempt from tax under the provincial Mineral Tax Act, Mining Tax Act and Petroleum and Natural Gas Act, on certain revenues connected to Nisga’a Lands.

> Real Property Taxation. The Nisga’a Nation and Nisga’a Villages will not be subject to property tax on Nisga’a Fee Simple Lands, while those lands are used only for government activities or non-profit activities.

> Nisga’a Settlement Trusts. A Nisga’a settlement trust, beneficial interests in the trust, and amounts distributed from the trust to a beneficiary (other than a Nisga’a citizen) are generally not taxable, except for goods and services tax.

> Gifts To The Nisga’a Nation or a Nisga’a Village. Persons who make gifts to the Nisga’a Nation or a Nisga’a Village will receive the same tax benefit that they would if they made the gift to a registered charity.

> Cultural Property and Import Act. The Nisga’a Nation (and any non-profit organization it establishes to receive, store and display cultural artifacts) will be treated as an institute “designated” under the Cultural Property Export and Import Act, under certain circumstances. This will allow a person who contributes cultural artifacts to the Nisga’a Nation (or the organization) to receive tax benefits under the Income Tax Act.

How long does the Taxation Agreement last?

Twelve years. However, it will continue in effect after that time unless one of the Parties to the Treaty provides notice to the other Parties to end the Agreement. In that case, the Parties will attempt to negotiate a further Taxation Agreement.