Tax information for individuals working at Canadian embassies outside Canada

This page provides general information about the Canadian income tax obligations of individuals working at Canadian embassies outside Canada.

Types of employees

Individuals working at Canadian embassies outside Canada are one of the following:

  • employees of the Canadian government posted abroad;
  • Canadian residents or former Canadian residents locally engaged (hired locally) by the embassy from its location outside Canada; or
  • non-residents of Canada locally engaged (hired locally) by the embassy from its location outside Canada.

If you were a resident of Canada before accepting employment at a Canadian embassy, you are considered either:

  • a factual resident of Canada if you kept ties with Canada; or
  • a deemed resident of Canada if you severed ties with Canada but were resident in Canada before being posted abroad.

What are the tax obligations of an employee of the Canadian government?

If you are an employee of the Canadian government posted abroad to work at a Canadian embassy, you are subject to income tax in Canada on your worldwide income for the year you leave Canada, and for each year you remain outside Canada as an employee of the Canadian government.

Example
Mario, an employee of the Canadian government, is posted at the Canadian Embassy in Belgium for a period of three years. Because Mario is an employee of the Canadian government, he is subject to Canadian income tax.

What are the Canadian tax obligations of a Canadian resident hired locally?

If you are a Canadian resident for tax purposes hired locally to work at a Canadian embassy while outside Canada, you are subject to income tax in Canada on your worldwide income for the year you leave Canada, and for each year you remain outside Canada.

Example
While visiting relatives in South Korea, Min Su, a Canadian resident, applies for a job at the Canadian Embassy in Seoul. Min Su is offered a one-year position and decides to live with his relatives while keeping residential ties with Canada (e.g., his house in Canada, a Canadian driver's license, and Canadian bank accounts). Because Min Su is a Canadian resident at the time he is hired, he is considered a factual resident of Canada for tax purposes.

What are the Canadian tax obligations of a former Canadian resident who is hired locally?

If you are a former Canadian resident who is hired locally to work at a Canadian embassy, and if you are considered a non-resident of Canada for tax purposes, you may be exempt from income tax in Canada on your employment income from the Canadian embassy. You can ask us for a tax reduction or waiver from the tax that is usually deducted from your salary. (If tax was already withheld from your income, you can file a Canadian income tax return to request a refund.) The particulars of your situation and the provisions of any relevant tax treaty will determine your tax obligations to Canada.

Example
Jane left Canada in 2001 to work for a private company in New Zealand. When she left, Jane severed all residential ties with Canada and became a non-resident of Canada for tax purposes. In March 2009, Jane was offered a position at the Canadian High Commission in Wellington. Because Jane was a non-resident of Canada for tax purposes at the time she was hired by the Canadian High Commission, her employment income is exempt from tax in Canada.

Residency status for tax purposes

For more information about residency status, see Interpretation Bulletin IT-221R3, Determination of an Individual's Residence Status.

If you are unsure of your residency status for tax purposes, complete and mail or fax us Form NR73, Determination of Residency Status (Leaving Canada), at the address below. We will give you our opinion on your residency status based on the information you give on the form.

International Tax Services Office
2204 Walkley Road
Ottawa ON K1A 1A8
CANADA

Fax: 613-941-2505

Need more information?

If you need more information, please call the International Tax Services Office .

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