The Canada Revenue Agency has a set of criteria defining missionaries for income tax purposes. If you qualify as a missionary, you can file your taxes as a Factual Resident of Canada, regardless of whether or not you have maintained your residential ties to the country. This can benefit you in a number of ways.
If you are a missionary in another country and you meet certain requirements, you can choose to be considered a factual resident even if you do not keep residential ties in Canada. To make this choice, you must satisfy all of the following requirements:
- be a Canadian citizen or a permanent resident of Canada
- be in the service of a religious organization that has its national ministry office in Canada
- be sent out of Canada for 5 years or less
- file an income tax and benefit return and report all income you receive from sources inside and outside Canada for each year you are absent from Canada
If you qualify as a missionary, you must complete and file a tax return every year you are out of the country and failure to file your return may result in your status changing.
Understanding Factual Residency
If you qualify as a missionary, you can file your income tax return as a factual resident. This means that regardless of where you may currently reside, you file your income tax return as if you lived in Canada.
As a factual resident, you not only have to report your income to the CRA and pay tax if you owe it, but you can also apply for tax credits and benefits such as the Canada Child Benefit (CCB) and the GST/HST Credit.
Changing Residency Status
As a missionary, your residency status may change at times, and you may not be able to file your income tax return as a factual resident.
For example, if you have been out of the country for more than five years, you no longer qualify as a missionary under the terms of the CRA’s rules, and, as a result, you cannot file your income tax return as a factual resident.
Likewise, if you do missionary work in a country that has a tax treaty with Canada and you establish residency in that country, you may lose your factual residency status with Canada. As a general rule, establishing residency in another company overrides your factual residency status.
Completing Your Income Tax Return
If you are not a missionary, you must retain residential ties with Canada to be considered a factual resident. When you file your income tax return, you should complete the tax package for the province or territory in which you maintain residential ties.
However, as a missionary, you are not obligated to maintain residential ties with the Canadian government. In this case, simply fill out the income tax return associated with the province or territory in which you last resided. If you paid foreign income tax, remember that you may qualify to claim the foreign federal tax credit.
If you have questions on determining your residency status or how you should be completing your tax return as a missionary in another country, you can contact CRA’s International Tax and Non-Resident Enquiries department for further clarification.
References & Resources