Here at Tax Return Filers Ltd, we are aware that tax can be a tricky thing, especially when it comes to Canadians who are employed by international institutions such as the United Nations (UN). As a UN employee or contractor your obligation to file taxes in Canada depends on whether you are considered a resident of Canada and the type of employment you have in Canada.
in this blog, we galvanize top tax TIPS for UN staff posted in Canada TO REMOVE BLUE-LIGHT OBSTACLES togetting the most out of your taxes.
Do UN Staff Pay Taxes in Canada?
Yes! Pursuant to Article 19 of the Convention on the Privileges and Immunities of the United Nations, UN staff members are generally exempt from income tax on their UN earnings in Canada. The exemptions are available to those who can provide written proof, e.g. employment verification letter from the UN human resource department or a relevant department confirming employment.
Eligibility:
You are a UN employee, not a contractor
Your employment income comes from the UN.
If you are eligible based on the above conditions, then you must take the exemption correctly.
Tax Return for UN Staff members: residents and non-residents.
As an immigrant to Canada, your tax status will determine your filing requirements in Canada, specifically, your residency status in Canada.
Deemed Residents of Canada
If you are a deemed resident of Canada (i.e., you have significant residential ties) even though you work outside of Canada, you have to report your worldwide income to the Canada Revenue Agency (CRA). But UN employees can exempt their UN income.
How to Claim the Exemption:
Report your Income earned employed by the United Nations (UN)on Line 10400 (Other employment income), then subtract the same amount on Line 25600 (Other deductions) to ensure the income is not being taxed.
Non-Residents of Canada
Assuming you are a non-resident of Canada (no significant residential ties), you would not have to file a Canadian tax return unless you have earned income that is sourced in Canada i.e., rental Income- section 216 return may be required or investments, T1 non-resident may be required depending upon the type of income. Income fromthe UN outside of Canada is also not taxed in Canada for non-residents.
What If You’re a UN Contractor (Not a Staff Member)?
The tax exemption does not apply if you are a consultant or contractor working for the UN (not as a regular staff member). In that case, you need to staple a copy of your 1099 form and report your earnings as self-employed and pay taxes.
If you are a UN contractor:
- You will report the income on Form T2125 (Statement of Business Activities).
- You can also deduct the business expenses incurred to earn the income (e.g., travel, home office, professional fees, other related expenses).
- You may need to pay CPP contributions if not exempt under a tax treaty.
At Tax Return Filers Ltd., we specialize in helping UN, World Bank employees and contractors to optimize their tax filings and tax compliance. If any of the above situations apply to you, please contact us, and our expert team will ensure you maximize deductions and comply with CRA rules.
Final Thoughts
If you’re a Canadian working for the UN, you may be eligible for tax-free income. It is very important to file the return correctly to avoid an audit. Contractors must report earnings but can deduct business expenses.