CTVNews.ca reports that the North Pole is part of Canada and Santa pays Canadian taxes. Even though the Minister's Office can't confirm it due to privacy issues, a spokesman says Mr. and Mrs. Claus wear Canadian colors and show the spirit of Canadians.
A spokesman noted, “with the kind permission of Mr. and Mrs. Claus (henceforth known as 'the Taxpayers'), the CRA has been permitted to share some confidential filing information.
The Canadian version of the IRS has records showing the Clauses pay taxes in the Northern Territories. They even benefit from a special tax deduction for living in the territories. Tax papers claim the Clauses pay employees with "holiday cheer" and accept payments in "cookies and carrots."