8. As a sole proprietor, is it possible to form a partnership with a non-native corporation? If yes, how does this affect my tax responsibilities for a contract to be fulfilled within the territory or outside the territory?

Yes, it is possible for a sole proprietor to form a partnership (for the purpose of this answer we assume it will be a general partnership as opposed to a limited partnership) with a corporation (a corporation is neither native nor non-native).  If you are a member of a partnership, your partnership income will be taxed in the same way as any other business income. For the purposes of section 87 of the Indian Act (this is the general  tax exemption for status Indians), the key factor will be the location of the partnership’s income-earning activities. Under the Income Tax Act, partnership income is first calculated as if the partnership were a separate person. Your share of the partnership income from each source will be allocated to you, and will retain its characteristics as to source and nature.  If all the partnership’s income-earning activities are carried out on a reserve, all your income from the partnership will be exempt from tax. If one-half of the partnership’s income-earning activities are carried out on a reserve, one-half of your share of the partnership income will be exempt.

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