Case Studies
Case Study: Tax Implications for Canadian Digital Nomads in Mexico
Explore how a Canadian digital nomad navigated tax challenges while living and working in Mexico.
By NomadicTax Research Team • 8 min read • November 12, 2025
## Introduction
As remote work becomes more popular, many Canadians are choosing to live abroad. This case study follows *Sarah*, a graphic designer from Toronto, who moved to Mexico while continuing her Canadian client work.
## Background
Sarah relocated to Playa del Carmen, Mexico, and found herself in a complex tax situation involving both Canadian and Mexican tax laws.
### Tax Residency Considerations
- **Canadian Residency**: Sarah maintained ties to Canada, such as her home and bank accounts.
- **Mexican Residency**: After living in Mexico for more than 183 days, she became a tax resident there.
### Tax Implications
1. **Canadian Taxes**: As a Canadian resident, Sarah had to report her global income, including earnings from her Mexican clients.
2. **Mexican Taxes**: Sarah was subject to Mexican income tax on her earnings generated while residing there.
## Steps Sarah Took
- **Consulted with Tax Professionals in Both Countries**: She got advice on how to manage dual taxation.
- **Claimed the Foreign Tax Credit**: This helped alleviate double taxation on her income.
## Conclusion
Sarah’s experience illustrates the importance of understanding tax obligations when living abroad. Digital nomads should seek professional guidance to navigate complex international tax laws.