CRA recently released a letter which discussed whether an Indian Band is a public body performing a function of government within the meaning of 149(1)(c) and therefore exempt from income tax on the interest income received from a GIC. The CRA found that the Indian Band was governed by an elected chief and band council, performed several functions of government and had passed by-laws under section 83 of the Indian Act. As such, it was determined to be a public body performing a function of government in Canada and therefore exempt from paying income tax and any tax on the interest from the GIC included in its income.

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