Government Employees Outside Canada — Montreal CPA Firm Near You: Factual Residents, Deemed Residents, Tax Filing Rules, CCB Eligibility, and Residency Determination

When federal or provincial government employees are posted abroad, they are subject to special income tax rules. Unlike other Canadians who may become non-residents when leaving the country, most government employees remain factual residents or deemed residents of Canada for income tax purposes while serving outside the country. Their spouses and dependent children may also be treated as deemed residents depending on circumstances.

This guide explains the residency categories, your tax obligations, which tax package to use, filing deadlines, eligibility for the Canada child benefit, and special rules for Canadian Forces overseas school staff. It is designed to help Canadian government employees abroad understand their obligations and avoid costly tax errors.

1. Residency Status for Government Employees Abroad

Government employees posted outside Canada are rarely considered non-residents. Instead, they are classified as factual residents or deemed residents.

Factual Residents

You are a factual resident if you:

• Keep significant residential ties in Canada while abroad, such as:

  • A home in Canada

  • A spouse or common-law partner in Canada

  • Dependants in Canada

Secondary ties can also support factual residency:

• Personal property in Canada (car, furniture)

• Economic ties (bank accounts, credit cards, investments)

• Social ties (Canadian memberships)

• Canadian passport

• Canadian driver’s licence

• Provincial/territorial health coverage

As a factual resident, you are treated as if you never left Canada for tax purposes.

Deemed Residents

You may be a deemed resident of Canada if you have severed residential ties but fall into one of these categories:

• Federal or provincial government employee posted abroad, AND

  • You were a Canadian resident immediately before leaving OR

  • You received a representation allowance during the year

Or if you are:

• A member of the Canadian Forces

• A person working abroad under a Global Affairs Canada program (and were resident within the 3 months before departure)

• A Canadian Forces overseas school staff member (who chooses to file as a deemed resident)

• A person exempt from foreign tax in another country due to your relationship to a Canadian resident

• A dependent child of any of the above, whose net world income in 2024 is not more than $15,705

These individuals remain Canadian taxpayers even if they no longer have ties in Canada.

Deemed Non-Resident

If you are a factual resident and you become resident in another country under a tax treaty, your status may change to deemed non-resident, meaning you will be taxed as a non-resident of Canada.

When in doubt, request CRA’s determination:

• Form NR73 — Determination of Residency Status (Leaving Canada)

2. Tax Obligations for Government Employees Abroad

If You Are a Factual Resident

You must:

• Report worldwide income

• Claim all deductions and federal/provincial/territorial tax credits

• Pay federal tax

• Pay provincial or territorial tax for where you keep residential ties

• Apply for GST/HST credit and CCB (if eligible)

If You Are a Deemed Resident

You must:

• Report worldwide income

• Claim all deductions and federal non-refundable tax credits

• Pay federal tax plus a federal surtax (instead of provincial/territorial tax)

• Claim federal refundable credits

• You cannot claim provincial or territorial tax credits

• You are eligible for GST/HST credit

In both residency types, you have full tax obligations as a Canadian resident.

3. Which Income Tax Package Should You Use?

Factual Residents

Use the Income Tax Package for the province or territory where you maintain residential ties.

This applies for the year you leave and all following years abroad.

Deemed Residents

Use the Income Tax Package for Non-Residents and Deemed Residents of Canada:

• For the year you leave

• For all following years you remain outside Canada

4. Filing Deadlines

Same as other Canadian residents:

• April 30 — Filing deadline

• June 15 — Filing deadline if you or your spouse/common-law partner carried on a business in Canada (but tax owing is still due April 30)

• Balance owing deadline: April 30

Even while abroad, government employees must file Canadian returns on time every year.

5. Canada Child Benefit (CCB) for Employees Abroad

If eligible, you continue to receive CCB during your absence from Canada.

To ensure uninterrupted payments:

• File an income tax return each year

• Your spouse or common-law partner must also file each year

If Your Spouse/Common-Law Partner is a Non-Resident

They must file:

• Form CTB9 — Income of Non-Resident Spouse or Common-Law Partner

This is mandatory because CCB is based on family net income.

If You Have a Child Born Abroad

Submit:

• Form RC66 — Canada Child Benefits Application

This includes both federal and provincial/territorial programs.

6. Special Situation: Canadian Forces Overseas School Staff

If you are Canadian Forces overseas school staff and you severed residential ties, you became a non-resident on the date you left.

Filing Options:

1. File as a non-resident

   • Use the tax package for your province at departure for the year you left

   • Use non-resident package in later years

2. Elect to file as a deemed resident

   • For the departure year, use your provincial package

   • For future years, use the Non-Residents and Deemed Residents package

Careful planning is required to choose the most tax-efficient residency position.

7. What Happens If Your Situation Changes?

Your residency may change if you:

• Decide to stay abroad permanently

• Move your spouse and dependants abroad

• Sell your Canadian home

• Cancel provincial health coverage

• Establish strong ties in the foreign country

If you sever residential ties, you become an emigrant, and special exit tax rules may apply. All future years are filed as non-resident.

Promptly seeking residency advice prevents errors and protects against double taxation.

8. Forms and Resources

Key CRA documents:

• Income Tax Package

• Non-Residents and Deemed Residents Tax Package

• Income Tax Folio S5-F1-C1 – Determining an Individual's Residence Status

• Form NR73 – Residency Determination (Leaving Canada)

• Form RC66 – CCB Application

• Form CTB9 – Income of Non-Resident Spouse for CCB

Why Mackisen

With over 35 years of combined CPA experience, Mackisen CPA Montreal specializes in residency and cross-border taxation for Canadians serving abroad.

We assist with:

• Determining whether you are factual, deemed, deemed non-resident, or emigrant

• Preparing the correct Canadian tax returns

• Understanding provincial vs. federal surtax obligations

• Ensuring uninterrupted CCB and GST/HST credits

• Handling foreign income reporting and treaty implications

• Filing CTB9 for non-resident spouses

• Providing tax planning before departure or upon return

If you are a government employee posted outside Canada or a family member accompanying them, Mackisen ensures you remain fully compliant while maximizing your benefits and minimizing tax burdens abroad.