Are UN Employees Tax Exempt?

If you are a Canadian working for the United Nations, you may generally be exempt from taxation on any income earned from the UN. Depending on if you are a resident or non-resident of Canada, your tax filing obligations may differ. Want to learn more on UN employee tax exemption? Then this article is for you.

Have you ever wondered whether United Nations employees have to pay any taxes in Canada? Are you a Canadian resident working for the United Nations or one of its affiliates? If so, you are probably wondering what your tax filing obligations are.

Generally speaking, any income that you earn from the United Nations can be received on a tax-free or a tax reduced the basis in Canada. This will depend on the specific convention between the United Nations and that specific country. There are different rules to follow depending on whether your employment is direct with the UN or one of its affiliate bodies. To be considered an employee of the United Nations, you must have a clear written employment agreement with the UN. However, this situation may be further complicated if you work for the United Nations abroad. In this case, the Canada Revenue Agency will have to assess whether you are a resident or a non-resident of Canada. The CRA does this by examining your personal, family, and economic ties to Canada.

Non-Residents of Canada

If you are deemed to be a non-resident of Canada, then the United Nations tax convention with Canada will not apply to you; therefore, you will not be liable for Canadian income taxes on your UN earnings. Find out the 10 major tax implications of becoming a non-resident of Canada.

Residents of Canada

If you are deemed as a resident of Canada, then the income earned from the United Nations can be exempted from tax in Canada. When completing your Canadian tax return as a resident of Canada, report the amount you received from the UN on line 104 of your income tax return. Also, report the same amount on line 256 as a tax deduction; this line is called Income Exempt from a Tax Treaty

In summary, Canadian residents working for the United Nations must still file a Canadian tax return and report their UN earnings. However, a careful analysis must be done of the Income Tax Act to see if you qualify for a deduction on line 256.

Are you a Canadian who is working abroad, overseas, or outside Canada tax implications? Find out what the tax implications are for Canadians working abroad.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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