Privileges: Tax treatment of the diplomatic community

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Categories of persons entitled to privileges

Diplomatic missions, consular posts (headed by a career consul), international organizations, and their accredited officials and family members are entitled to a number of privileges and tax concessions, subject to certain conditions. The Office of Protocol’s Privileges and Immunities Unit is the point of contact for guidance on privilege-related matters to foreign missions and international organizations.

The following is a summary of fiscal privileges – exemptions and entitlements related to customs duties, taxes, and fees – available to diplomatic missions, consular posts, international civil servants and other privileged personnel according to their status.

Diplomatic missions and consular posts

  • Exempt from customs duties and taxes on all goods imported into Canada for the official use of the diplomatic mission or consular post (headed by a career consul)
  • Entitled to a refund of the GST/HST paid on locally purchased goods, based on reciprocity
  • Exempt from taxes levied by municipal taxing authorities for chanceries and official residences based on reciprocity (refer to Guidelines on property transactions).

International organizations

Diplomatic agents (persons with equivalent status) and consular officers

  • Exempt from customs duties and taxes on imported goods, including alcohol and tobacco products, intended for their personal use on first arrival in Canada, and at any time over the course of their assignment; this privilege includes goods purchased from licenced in-bond suppliers for personal (in home) use
  • Exempt from Canadian income tax on their salaries, allowances, or other remuneration they receive in their official capacity, and on any income derived from sources outside Canada
  • Entitled to a refund/rebate of the GST/HST paid on locally purchased goods, based on reciprocity
  • Entitled to a refund/rebate of the Federal Excise Tax (FET) on gasoline and diesel
  • Exempt from temporary resident visa application fees and biometrics collection.

Accredited foreign representatives who purchase property in a private capacity do not enjoy an exemption from property taxes or land transfer taxes. Nor can they claim a GST/HST rebate on the transaction. However, a GST/HST new housing rebate may be available, subject to the Canada Revenue Agency’s normal regulations. The sale of privately purchased property by accredited foreign representatives or formerly accredited foreign representatives is similarly subject to all Canadian tax regulations, including on any capital gain.

Administrative and technical staff and consular employees

  • Exempt from customs duties and taxes on personal goods, including alcohol and tobacco products, imported into Canada within the first 6 months of the staff member’s arrival. This time-limited privilege includes goods purchased from licenced in-bond suppliers for personal (in home) use
  • Exempt from Canadian income tax on their salaries, allowances, or other official remuneration received, and on any income derived from sources outside Canada
  • Entitled to a refund/rebate of the GST/HST paid on locally purchased goods, based on reciprocity
  • Exempt from temporary resident visa application fees and biometrics collection.

Service staff

  • Exempt from Canadian dues and taxes on the emoluments they receive by reason of their employment with the mission or post
  • Exempt from temporary resident visa application fees and biometrics collection.

Accredited domestic workers

  • Exempt from Canadian dues and taxes on the emoluments they receive by reason of their employment with the hiring official
  • Exempt from temporary resident visa application fees.

Locally engaged staff

  • Locally hired staff and Canadian citizens and permanent residents, including dual nationals (holding Canadian nationality) are not eligible for fiscal privileges
  • Depending on the agreement signed by an international organization and the Government of Canada, their Canadian employees may be subject to the organization’s staff assessment plan, in which case they do not pay income tax on their salaries or other remuneration received in their official capacity; however, to determine their eligibility for receiving Canadian refundable tax credits, such earnings are taken into account (refer to International organizations and other offices under the Foreign Missions and International Organizations Act or the Privileges and Immunities (North Atlantic Treaty Organisation) Act for a list of accredited international organizations based in Canada, their headquarters agreements, and the orders in council detailing the privileges and immunities accorded to the entity and its officials).

Honorary consular officers

  • Are exempt from all dues and taxes on the remuneration and emoluments received from the sending State in respect of the exercise of consular functions
  • Do not enjoy importation/customs privileges beyond those specified under Article 62 of the Vienna Convention on Consular Relations; they are exempt from customs duties and taxes on limited and specific imported goods for the consular post’s official use, such as: office furniture and equipment, flags, coats of arms, signage, books, seals, and official printed material, among other similar supplies (the diplomatic mission is expected to be the importer of record);
  • Do not enjoy a rebate of the GST/HST on personal expenses and official expenses of the post itself
  • Do not enjoy exemptions of customs/excise taxes on the purchase of alcohol (even if purchased for official events) or tobacco.

Honorary Consuls may also be eligible for additional courtesies offered by the provincial and/or the municipal government in which they operate. To learn more about any such courtesies, contact the relevant provincial office of protocol and municipal government.

Income tax exemption

Missions, posts, and international organizations under privilege, do not pay withholding tax on any interest earned from their official bank accounts in Canada. This exemption also applies to capital gains derived from government securities, bonds, debt certificates, and distributions paid from trust funds.

In accordance with articles in the Vienna Convention on Diplomatic Relations and Vienna Convention on Consular Relations, privileged staff members of a diplomatic mission, consular post or international organization, and their officially recognized family members, are exempt from income tax on their salaries, allowances, or other remuneration they receive in their official capacity, as well as on any income derived from sources outside Canada. As foreign representatives cannot practise any professional or commercial activity for personal profit, there should be no income from employment in Canada or from a business carried on in Canada, or property rental income. However, privileged persons are generally liable for paying Canadian income tax for revenue derived from sources in Canada, including such things as bank interest, company dividends, capital gains from the disposition of certain Canadian property.

In instances where family members are permitted to work and employed in Canada and earn a salary or wage, they may be required to complete and submit an annual income tax return to the Canada Revenue Agency. (Refer to Guidelines on the employment of accredited family members). The Office of Protocol does not provide advice on the application or effects of double taxation treaties.

For additional information, foreign states and their representatives may contact Canada Revenue Agency’s Income Tax Rulings Directorate to request a ruling or technical interpretation of Canadian income tax law regarding tax obligations or in advance of a proposed transaction they are contemplating that may have tax implications.

Locally engaged staff

Locally engaged staff members who are Canadian citizens, permanent residents or foreign nationals are required to pay Canadian income tax on the income earned at diplomatic missions and consular posts. If a mission or post is not registered as an employer, their staff are responsible for paying their own federal and provincial income tax.

Many missions have entered into a voluntary arrangement with the Canada Revenue Agency for payroll deductions/remittances on the salary of locally engaged staff, entailing the issuance of annual T4 slips by the employer. Payroll taxes and corresponding deductions/remittances may include Employment Insurance (EI) and the Canada Pension Plan (CPP). As the Office of Protocol does not compile a list of employing missions that deduct payroll taxes, locally engaged staff are advised to seek clarification directly from their employer.

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Importing goods exempt from customs duty and tax

Customs duties and the goods and services tax/harmonized sales tax (GST/HST) may be waived on goods imported to Canada where the goods are not intended for sale but strictly for the following:

  • Official use of missions, posts, and organizations, and necessary to meet reasonable official requirements
  • Personal use of accredited foreign personnel and family members who enjoy diplomatic status, and which meet reasonable personal requirements
  • Personal use of administrative, technical, and consular employees and family members, imported within 6 months of the representative’s arrival in Canada.

Only goods imported directly by, or on behalf of, a diplomatic mission, consular post, or privileged person are free of customs duties and the GST/HST. On entry into Canada, the goods must be clearly identified on all importation and customs documents and accompanied by a certificate from the mission, post, or organization stating the goods are being imported for official use by the accredited office or the personal use of a privileged person. It is important for customs brokers authorized to clear imported goods and suppliers who are buying imported goods for accredited offices and personnel to be aware of this requirement, because once the GST/HST on imported goods is paid, a refund or rebate may only be possible via the submission of Form B2G – CBSA Informal Adjustment Request. 

The Canadian Border Services Agency (CBSA) facilitates the flow of legitimate goods and travellers into Canada. CBSA’s memorandum on Memorandum D21-1-1: Customs Privileges for Diplomatic Missions, Consular Posts and Accredited International Organizations - Tariff Item No. 9808.00.00 outlines the customs duty entitlements granted to missions, posts, some organizations, and their officially recognized personnel and family members. This document details the requirements for importing goods for official and personal use, including such things as motor vehicles, personal baggage, household goods, diplomatic bags, and alcohol. It also provide links to the forms to be filled out and specify the documentation required for the release of goods and the proper accounting of these goods.

Exclusions

Customs duties and GST/HST exemption privileges are not enjoyed by accredited members of the service staff, private domestic staff, locally engaged staff.

Clearing goods imported for official and personal use

Please refer to the Memorandum D21-1-1: Customs Privileges for Diplomatic Missions, Consular Posts and Accredited International Organizations - Tariff Item No. 9808.00.00, including the following sections:

Motor vehicle imports, purchases, and exemptions from customs duties and taxes

Diplomatic missions, consular posts (headed by a career consul), international organizations, diplomatic agents, (or persons with equivalent status), administrative and technical staff, consular officers and employees, and their officially recognized spouses or partners may import, purchase, and sell their motor vehicles subject to reciprocity and other conditions.

Service staff, honorary consular officers, and citizens and permanent residents of Canada, including dual nationals (holding Canadian nationality), employed at an accredited mission, post, or other office, do not benefit from entitlements related to motor vehicle duty or tax exemptions.

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Directly importing a motor vehicle, not through a vehicle dealership

  • Where a diplomatic mission, consular post (headed by a career consul), international organization, diplomatic agent (or person with equivalent status), administrative and technical staff member, consular officer, consular employee, and their accredited spouse/partner has purchased a motor vehicle abroad and obtained legal title before its entry into Canada, and directly imports it without going through a car dealership, customs duties and the goods and services tax/harmonized sales tax (GST/HST) are not payable.

New motor vehicle imported by a Canadian dealership directly from overseas

  • Diplomatic missions, consular posts (headed by a career consul), international organizations, diplomatic agents (or persons with equivalent status), administrative and technical staff, consular officers and employees, and their accredited spouses/partners can import a new vehicle through a registered dealership in Canada free of customs duties, if they are the importer of record; if they are not the importer of record, the importation taxes (for example, customs and excise) may be incorporated in the price payable of the vehicle
  • The GST/HST must be paid to the dealer at the point of purchase, though if a reciprocal arrangement exists, the tax can later be claimed through a rebate.

New/unused motor vehicle purchased from a Canadian dealership

  • Diplomatic missions, consular posts (headed by a career consul), international organizations, diplomatic agents (or persons with equivalent status), administrative and technical staff, consular officers and employees, and their accredited spouses/partners can purchase a reasonable number of new (unused) vehicles locally from a dealership
  • The GST/HST must be paid to the dealer, though based on reciprocity, the tax can be reimbursed by applying for a rebate.

Second-hand/used motor vehicle purchased from a Canadian dealership

  • Second-hand/used vehicles bought from a registered Canadian dealer are subject to the GST/HST; where a reciprocal arrangement exists with the buyer’s country, the diplomatic mission, consular post (headed by a career consul), international organization, diplomatic agent, administrative and technical staff member, consular officer, consular employee, or their accredited spouse/partner may apply for a rebate of the GST/HST
  • Second-hand/used vehicles can also be purchased locally and exempt from GST via a private sale. In Ontario, eligible foreign representatives may request to be exempt at source from the retail sales tax (RST) normally paid when the vehicle is registered.

Motor vehicle purchased from a diplomatic mission, consular post headed by a career officer, international organization, or privileged individual

  • Where a motor vehicle purchased under privilege by a diplomatic mission, consular post (headed by a career consul), international organization, diplomatic agent (or person with equivalent status), administrative and technical staff member, consular officer, consular employee, or their accredited spouse/partner is subsequently sold to another mission, post, or privileged individual with the same or greater tax entitlements as the seller, the customs duties and GST/HST are not payable.

Importing a motorcycle or purchasing one from a local dealership

  • Motorcycles may be imported into Canada free of customs duties and taxes
  • Privileged individuals with entitlements which allow them to claim tax refunds on new imported motor vehicles may seek a GST/HST rebate paid on a locally purchased new motorcycle, subject to meeting the applicable limits on the reasonable number of vehicles.

Selling a motor vehicle imported under privilege

  • Where reciprocal arrangements are in place, vehicles belonging to diplomatic missions, consular posts (headed by a career consul), diplomatic agents (or persons with equivalent status), consular officers and employees, and their accredited spouses/partners that were purchased new or imported, and which meet Canada specifications, can be sold free of customs duties and the GST/HST after a 2-year retention period*
  • If a privileged office or person wishes to sell their Canada-compliant vehicle before the 2-year retention period has lapsed, they are required to pay any customs duties and taxes owing; missions, posts, international organizations and their accredited officials can seek a waiver of customs duties and taxes owing from the Office of Protocol when the person has been recalled by their headquarters or in the event of a privileged person’s death
  • Consular employees and administrative and technical staff members and their accredited spouses/partners can sell their Canadian-compliant vehicles, bought new or imported, at the end of their assignments customs duties and are GST/HST-exempt
  • In instances where a country places restrictions on selling imported vehicles on Canadians working at Canadian missions and posts abroad, Canada will apply reciprocal treatment; this means that even if their imported vehicle meets Canadian standards, there is a mandatory 3-year retention period after which persons from these countries can sell their vehicles – free of customs duties and the GST/HST – subject to written authorization from the Office of Protocol.
  • Second-hand/used vehicles that were bought locally may be sold at any time. Such vehicles sold privately are not subject to payment of the GST/HST by the purchaser.

*To note that the retention period only applies to imported vehicles only, not to vehicles purchased in Canada.

Wine and spirit imports and purchases exempt from customs duty and tax

Diplomatic missions, consular posts (headed by a career consul), diplomatic agents (or persons with equivalent status), and consular officers are authorized to import beer, wine, and spirits exempt from customs duties and the good and services tax/harmonized sales tax (GST/HST) for their official and/or personal use.

Administrative and technical staff and consular employees are allowed to import alcoholic beverages free of customs duties and the GST/HST during the first 6 months of their assignment in Canada.

Service staff, private domestic staff, locally engaged staff, honorary consular officers are not eligible for importing duty-and tax-exempt wine and spirits.

Under no circumstances are accredited entities or persons authorized to sell imported alcoholic beverages purchased under privilege.

Alcohol imported for official special events

Diplomatic missions, consular posts (headed by a career consul), diplomatic agents (or person with equivalent status), and career consular officers are entitled to import, at all times, alcohol exempt from customs duties and the GST/HST for special representational events taking place on their official premises. They may also do so for representational events held outside their premises provided the importation has been authorized by the Office of Protocol's Privileges and Immunities Unit.

In addition, missions and posts may donate beer, wine, and spirits purchased under privilege to charitable and special wine-tasting events, subject to reciprocity and certain conditions, including written authorization from the Office of Protocol. The event must be hosted or co-hosted by a diplomatic agent or career consular officer and all applicable laws respected, including obtaining a permit from the appropriate provincial authority to serve alcohol imported duty- and tax-free, even where the venue is licenced to serve alcohol.

The submission to the Office of Protocol must be made well in advance of the event and include:

  • The date, location and anticipated hours of the event
  • The type of event (for example, special representational event, charitable event, etc.)
  • The name and title of the accredited representative who will be present as host or co-host at the event, along with a copy of the host’s or co-host’s invitation
  • A confirmation that:
    • The relevant provincial liquor permit has been or will be sought and received from the provincial liquor board, where applicable
    • The proceeds of the event are to be donated to a registered Canadian charity, along with the charitable registration number issued by the Canada Revenue Agency (does not apply to special representational events)
    • The alcoholic beverages will not be sold, auctioned off or used as door prizes and
    • Any alcohol beverages not consumed during the event will be returned to the diplomatic mission, the consular post, or official residence

At the time of importation, the alcoholic beverages must be specifically consigned, in name, to the diplomatic mission, the consular post or international organization and not to a third party or an agency. As such, they must be accounted for on a Commercial Accounting Declaration in the CARM Client Portal in using the diplomatic mission, consular post, or international organization’s business number and import-export program (RM) account number. Along with the Commercial Accounting Declaration, the commercial invoice, and the cargo control document, the person accounting for the goods must present the original authorization letter issued by GAC. All provincial liquor board requirements must be met.

Related content: Liquor Control Board of Ontario.

Federal goods and services tax/harmonized sales tax rebate

Foreign representatives, diplomatic missions, consular posts (headed by a career consul), and international organizations are required to pay the good and services tax/harmonized sales tax (GST/HST) charged by retailers and suppliers on taxable domestic purchases at the point of sale in Canada; point-of-sale relief from the GSt/HST on domestic purchases is not possible. If a reciprocal arrangement exists, privileged offices and persons can recover the GST/HST paid on local purchases by means of a refund/rebate program. 

GST/HST rebate opportunities

The following may qualify for a rebate of the GST/HST paid on goods and services purchased in Canada for official use:

  • Diplomatic missions*, based on reciprocity
  • Consular posts* (headed by a career consul), based on reciprocity
  • International organizations
  • Taipei Economic and Commercial Offices

* Offices or sections that form part of diplomatic missions or consular posts cannot submit a GST/HST rebate application in their own name. Instead, the application must always be submitted in the name of the supervising diplomatic mission or consular post and contain the primary address of that mission or post. Also, receipts for purchases made by the said offices or sections must explicitly refer to the name of the supervising diplomatic mission or consular post and be included with applications for rebate of GST/HST filed in the name of the supervising consular post.

The following privileged persons who are accredited to Canada are eligible to apply for a GST/HST rebate:

  • Diplomatic agents and their spouse/partner
  • Administrative and their technical staff or their spouse/partner
  • Consular officers and their spouse/partner
  • Consular employee and their spouse/partner 
  • Officials of an international organization with diplomatic status or their spouse/partner
  • Officials of the Taipei Economic and Cultural Offices

The above-mentioned representatives can claim the GST/HST paid on goods and services for their personal use and the use of their accredited family members forming part of the household.

Spouses/partners who have been issued with Government of Canada identity card numbers which are different from the foreign official’s number are required to file separate rebate applications.

Relief from the GST/HST does not apply to supplies of real property (for example, a house) acquired for personal use. However, a GST/HST new housing rebate may be available, subject to the normal rules in the Act and its regulations. For more information, refer to Guide RC4028, GST/HST New Housing Rebate.

Global Affairs Canada regularly provides the Canada Revenue Agency with an updated list of eligible foreign representatives and their spouses/partners for GST/HST rebate purposes.

GST/HST rebate ineligibility

The GST/HST rebate is not available to:

  • spouse/partner of a career consular officer or consular employee who has obtained permission to work locally
  • Service staff
  • Private domestic workers
  • Honorary consuls
  • Locally-engaged staff

Applying for the GST/HST rebate

Eligible foreign missions and their representatives based in all Canadian provinces except Quebec may claim rebates on domestic purchases using the form GST/HST rebate application for foreign representatives, diplomatic missions, consular posts, international organizations, or visiting forces units.

If more space is required due to a longer application, there is a supplemental form to list the rest of the purchases. Both forms should be filed together.

To apply for the tax rebate in Quebec, foreign entities and their representatives based in that province should use the form Rebate of taxes and duties for foreign representatives, diplomatic missions, consular posts, offices of a political division of a foreign state and international organizations.

Eligible persons or entities may not apply for a rebate of GST/HST, if the tax amount has already been rebated or remitted.

Application filing deadline

Applications for GST/HST rebates must be filed within two years after the date the GST/HST was paid. No more than one application for a GST/HST rebate may be submitted by each rebate applicant per calendar month.

Documents to include with the rebate application

Applications for GST/HST rebates must include copies (and not the originals) of the receipts for all purchases listed. The Canada Revenue Agency will not return any documentation submitted with an application.

Credit card slips or bank debit transaction slips will not be accepted as proof of purchase. Only copies of cash register receipts are to be submitted with the rebate application.

Original documentation including each GST/HST rebate application form and the original receipts of the purchases listed in the claim must be retained as records for a period of 6 years, as rebate claims may be subject to further review at a later date.

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GST/HST on imported goods

GST/HST relief on importations of taxable goods is provided at the point of entry into Canada, as follows:

  • Diplomatic missions, consular posts (headed by a career consul), and accredited international organizations, on importation of goods for official use
  • Diplomatic agents, consular officers, designated officials of an international organization, and members of their respective families forming part of their households, on importation of goods for personal use
  • Members of the administrative and technical staff of a diplomatic mission, consular employees, and members of their respective families forming part of their households, on importation of goods for personal use — for a period not exceeding 6 months after their arrival in Canada.

Federal excise tax on gasoline and diesel fuel rebate, and on insurance premiums

Upon application, the federal excise tax (FET) component of the price of gasoline and diesel fuel may be reimbursed to certain categories of personnel. The Canada Revenue Agency administers the processing of FET refund/rebate applications. Foreign representatives are required to pay the FET charged by Canadian suppliers at the point of sale and then recover the tax paid by means of a rebate. Furthermore, all non-residents who have been charged the tax on insurance premiums (other than marine levies) may seek a refund from the federal government.

FET rebate eligibility

The following persons are eligible to apply for a rebate of the FET paid on gasoline and diesel fuel purchased in Canada:

  • Diplomatic agents or their spouse/partner
  • Consular officers or their spouse/partner
  • Officials of an international organization with diplomatic status or their spouse/partner

FET rebate ineligibility

The FET rebate is not available to:

  • Administrative and technical staff
  • Consular employees
  • Service staff
  • Private domestic staff
  • Honorary consular officers
  • Locally-engaged staff.

Eligible persons can apply to recover the FET using the Excise tax application for a refund/rebate form. Detailed instructions on how to complete the application are found on page 2 of the form.

Rebate claims may be made either online or by post, within two (2) years after the purchase of the gasoline or diesel fuel.

Provincial excise tax on gasoline and diesel fuel rebate

Some provincial legislation provides an exemption of the provincial tax on gasoline and diesel fuel to certain categories of accredited foreign representatives. To learn more about any such privileges, please contact directly the relevant Provincial Offices of Protocol or provincial ministry of revenue.