Regarding whether a NATO employee working outside Canada would be exempted having regard to Article 19 of the Agreement on the status of the North Atlantic Treaty Organization, National Representatives and International Staff (the "Agreement"), the Directorate stated:
Article 19 of the Agreement provides that certain officials of NATO (consisting of the Council and subsidiary bodies) shall be exempt from taxation on the salaries and emoluments paid to them by NATO or any of its bodies in their capacity as officials of that organization. The category of officials who may benefit from this exemption shall be a category agreed between the Chairman of the Council Deputies and each of the governments of the member states concerned.
However, as noted in paragraph 4 of IT-397R, where Canada employs and pays an individual and then seconds or lends that person to act as an official of the organization, Canada retains the right to tax the individual when he or she is resident in Canada or is deemed to be resident in Canada (factually or deemed). Furthermore, the exemption described in the previous paragraph does not apply in the case of an official of Canada or a member of the Canadian Forces who represents Canada at NATO or one of its subsidiary bodies.