Tax information for individuals working at foreign embassies in Canada
This page provides general information about the Canadian income tax obligations of individuals working at foreign embassies in Canada.
Types of employees
For Canadian tax purposes, an individual working at a foreign embassy in Canada will be considered one of the following:
- a locally engaged employee-a Canadian resident hired locally to work at a foreign embassy in Canada; or
- a foreign national-a non-resident of Canada who came to Canada solely to work at the foreign embassy.
What are the Canadian tax obligations of an employee hired locally?
If you are a locally engaged employee, you are subject to income tax in Canada on your worldwide income, including the employment income received from a foreign government. You have to file a Canadian income tax return.
Example
Arturo became a resident of Canada for tax purposes at the time he came to Canada in 2007 to work for a Canadian company. Before this, Arturo was a resident and citizen of Brazil. In 2008, the Embassy of Brazil in Canada hired Arturo. Because Arturo did not come to Canada solely to work at the foreign embassy, he will be subject to tax in Canada on his worldwide income, including the employment income received from the foreign government.
What are the Canadian tax obligations of a foreign national?
If you are a foreign national as described above, you are exempt from income tax in Canada. However, you have to file a Canadian income tax return if you receive other types of Canadian source income.
Example
Marie was a resident and citizen of France at the time she was assigned by her government to work at the Embassy of France in Canada. Because Marie came to Canada solely to work at the foreign embassy, and because she does not receive other types of Canadian source income, she is exempt from income tax in Canada.
Note
If you are a foreign national and your spouse accompanied you when you came to Canada, and your spouse is later hired by the foreign embassy, he or she is considered a locally engaged employee and is exempt from tax in Canada on the employment income from the foreign embassy.
If you are a foreign national and your spouse accompanied you when you came to Canada, and your spouse is later hired by a local employer or becomes self-employed, he or she is subject to Canadian income tax and has to file a Canadian income tax return.
Which tax package should you use?
If you are a locally engaged employee, you should use the General Income Tax and Benefit Package for the province or territory where you lived on December 31 of the year for which you have to file an income tax return.
Residency status for tax purposes
For more information about residency status, see Residency - Individuals or 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 NR74, Determination of Residency Status (Entering 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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