First Nations Tax Exemptions in Canada (2025 Guide)

First Nations (Status Indian) individuals and businesses in Canada can access a range of important tax exemptions, covering income tax, GST/HST, provincial sales taxes, and property tax—especially for income earned and goods/services acquired on a reserve. However, these exemptions have strict eligibility criteria and documentation requirements. This in-depth guide explains who qualifies for First Nations tax exemptions, how tax-free status works, the rules for GST/HST, income tax, business, property tax, and provincial variations. We also clarify common misconceptions, provide claim tips, and link to authoritative resources for Indigenous peoples and advisors.

What’s Covered: Indian Act tax exemption rules, GST/HST and PST exemptions, income and business tax, property tax, and documentation
Who’s Eligible: Status Indians (as defined by the Indian Act), recognized bands, certain band-owned businesses, and eligible purchases on reserve
Quick Links: Who Qualifies, Income Tax, GST/HST, PST, Property Tax, Business, FAQ

For GST/HST rebate details, see: GST/HST Rebates

A First Nations community on reserve land in Canada, with Indigenous individuals and businesses illustrating tax exemption status

Who Qualifies for First Nations Tax Exemptions?

Status Indians: Individuals registered under the federal Indian Act and holding a valid Certificate of Indian Status ("status card").
Indian Bands & Band Councils: Recognized bands and their governing councils, as per the Indian Act.
Band-Operated Entities: Corporations, trusts, or partnerships where all ownership is by a band or status Indians, and the business operates on reserve.
Location-Based: For most exemptions, income must be earned, or property/goods must be situated, acquired, or delivered on a reserve. Some exemptions require both the buyer and the business to be on reserve land.

Note: Not all Indigenous peoples in Canada are eligible. Métis, Inuit, and non-status First Nations people do not qualify for Indian Act tax exemptions.

Income Tax Exemption for Status Indians

Section 87 of the Indian Act: Income earned by a status Indian is exempt from federal and provincial income tax if it is "situated on a reserve."
Employment Income: Salary or wages are tax-exempt if the duties of employment are performed on a reserve, or the employer is resident on a reserve, and/or the income is “reasonably connected” with the reserve.
Business Income: Self-employed income is exempt if the business is conducted and managed on a reserve.
Investment & Other Income: Rent, pension, or other income may be exempt if the asset is located or administered on reserve; strict rules apply.
Filing a Tax Return: Status Indians with exempt income should still file a tax return and indicate exempt amounts on Line 25600 (other deductions) with supporting documentation (T4 slips marked "exempt").
Partial Exemption: If work/income is split between on- and off-reserve, only the portion related to on-reserve is exempt. Proportional allocation is required.
Resources: CRA Guide for Indians

Important: Income earned off-reserve (e.g., city jobs, remote work for non-reserve employers) is generally taxable, even if the individual resides on reserve.

GST/HST Exemption for Status Indians, Bands, and Businesses

Goods Purchased on Reserve: Status Indians, Indian bands, band councils, and band-owned businesses do not pay GST/HST on eligible goods purchased on a reserve or delivered to a reserve.
Proof Required: Must present a valid status card or band certification at the time of purchase; vendors keep a record for CRA.
Goods Delivered to Reserve: For online or off-reserve purchases, GST/HST is exempt if the goods are delivered to a reserve address by the vendor or their agent/courier.
Services: Most services (e.g., repairs, utilities) are taxable, unless performed entirely on reserve for a status Indian or band.
Business Purchases: Band-owned businesses (if all owners are status Indians or the band) may be eligible for GST/HST exemption on reserve.
Off-Reserve Purchases: GST/HST generally applies to goods/services acquired off-reserve, unless delivered to a reserve as above.
Resources: CRA GST/HST Info for Indigenous Peoples

Tip: Vendors may require you to show your status card and may need to complete a point-of-sale exemption form.

Provincial Sales Tax (PST/RST/QST) Exemptions

Ontario: Status Indians and bands are exempt from Ontario's portion of HST (8%) on qualifying purchases made on a reserve or delivered to a reserve, with proof of status.
British Columbia: Status Indians and bands are exempt from PST on goods purchased on reserve, or delivered to a reserve, with a status card.
Quebec: QST exemption applies to goods acquired on reserve or delivered to a reserve, with a valid status card.
Manitoba/Saskatchewan: RST exemption for eligible purchases acquired on or delivered to a reserve.
Atlantic Provinces: HST exemption rules mirror GST/HST for on-reserve purchases.
Receipts: Vendors must indicate tax exemption on receipts and retain records to support the exemption.

Note: Provincial rules may differ slightly—always check with the relevant provincial tax authority or band administration office.

Property Tax Exemptions on Reserve Land

Indian Act Exemption: Real property on reserve land is generally exempt from municipal and provincial property taxes.
Leased Lands: Non-status individuals or businesses leasing land on reserve may be subject to band-imposed fees or service charges instead of municipal taxes.
Band-Administered Taxes: Some First Nations levy their own property taxes or service charges under the First Nations Fiscal Management Act.
Off-Reserve Properties: No tax exemption for property owned off reserve.

Tip: Contact your band office or local tax authority for details on property taxation for on-reserve housing and businesses.

First Nations Businesses: Tax Exemption Rules

Band-Owned Corporations: Income earned by a corporation wholly owned by a band and operating exclusively on reserve may be exempt from income tax.
Partnerships & Trusts: Income allocation rules are complex; tax exemption may apply only to the portion earned on reserve and by eligible owners.
GST/HST Registration: Businesses on reserve may still need to register for GST/HST if selling taxable goods/services off reserve or to non-status customers.
Employment of Status Indians: Employers on reserve must issue T4 slips and indicate "exempt" income, with supporting documentation.
Business Purchases: Exemption applies to goods acquired on reserve or delivered to a reserve, for use in the business.
Professional Advice: Tax rules for Indigenous businesses can be complex. Consult a tax professional or Indigenous tax specialist for guidance.

More: See our Canada-Wide Business Tax Credits for other opportunities that may apply to First Nations entrepreneurs.

Frequently Asked Questions: First Nations Tax Exemptions

Do I need to live on a reserve to qualify for tax exemption?

For income tax exemption, income must be earned on a reserve—not just residence. For GST/HST and PST, goods generally must be acquired or delivered on a reserve, regardless of your home address.

Are Métis or Inuit eligible for Indian Act tax exemptions?

No. Only individuals registered under the Indian Act as Status Indians can access these exemptions. Métis and Inuit have other rights, but not the same tax status.

Can I claim the GST/HST exemption for online purchases?

Yes, if the goods are delivered by the vendor or their agent to a reserve address and you provide a valid status card. Pickup off reserve does not qualify.

Are vehicles purchased by Status Indians exempt from sales tax?

Yes, if the vehicle is delivered to a reserve and all documentation requirements are met (status card presented, registered to the eligible individual or band).

Do I need to file a tax return if all my income is exempt?

Yes. You should file to claim benefits (e.g., GST credit, child benefit), to report exempt income, and to maintain eligibility for government programs.

What happens if my income is earned partly on and partly off reserve?

Only the portion earned on reserve is tax-exempt. You must allocate income proportionally and report both exempt and taxable amounts on your return.

Related Guides & Resources

Official Resources:
CRA Indigenous Tax Info | Indigenous Services Canada

For province-specific tax break guides:
Ontario | BC | Quebec | Alberta