Home » INTERNATIONAL TAXATION » GUIDE to Employee Taxation in International Organisations: European Commission, ECB, UN, World Bank, IMF and Others




GUIDE to Employee Taxation in International Organisations: European Commission, ECB, UN, World Bank, IMF and Others


International organisations for special services rendered enjoy special privileges and immunities and are not subject to the law of the country in which they are established.

Exceptions are ultra vires activities, i.e. outside the services for which they were established, which do not enjoy the special status and are instead subject to the law of the place.

Organisations have, therefore, the power to decide on their internal organisation and high officials enjoy special diplomatic immunities, while employees’ immunities are limited to the performance of their duties, but special regulations apply to them with regard to employment contracts and social security.

In general, the salaries as well as all income of members/officials/employees are subject to specific taxation in favour of the institution or organisation itself, with an exemption from the tax laws of both the country where the organisation is based, which would have an advantage in collecting the taxes of all the organisation’s employees, and in the country of origin of the employees, to avoid tax inequalities due to the different tax systems of states.

There are generally territorial or headquarters agreements between the international organisation and the host state to regulate the salaries, wages and pensions paid by organisations to their officials.


Employees totally legitimately maintain a tax residence ex lege in their home country without living there permanently.





In EUROPE there is a Protocol on the Privileges and Immunities of the European Union that regulates the immunities granted to officials and servants of the Union and their families and also specifies the privileges.

Salaries, wages and emoluments paid to members of the European institutions are exempt from national taxation in the Member States of the European Union.

This tax exemption is granted on the basis of Article 12 of the Protocol on the Privileges and Immunities of the European Union:

Article 12
Officials and other servants of the Union shall be liable to a tax for the benefit of the Union on salaries, wages and emoluments paid to them by the Union, in accordance with the conditions and procedure laid down by the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure and after consultation of the institutions concerned.

They shall be exempt from national taxes on salaries, wages and emoluments paid by the Union.


Article 13 of the Protocol specifies that the employee’s tax domicile remains in the European country where he or she was employed at the time of the assignment of the official.

Article 13
In the application of income tax, wealth tax and death duties and in the application of conventions on the avoidance of double taxation concluded between Member States of the Union, officials and other servants of the Union who, solely by reason of the performance of their duties in the service of the Union, establish their residence in the territory of a Member State other than their country of domicile for tax purposes at the time of entering the service of the Union, shall be considered, both in the country of their actual residence and in the country of domicile for tax purposes, as having maintained their domicile in the latter country provided that it is a member of the Union. This provision shall also apply to a spouse, to the extent that the latter is not separately engaged in a gainful occupation, and to children dependent on and in the care of the persons referred to in this Article.

Movable property belonging to persons referred to in the preceding paragraph and situated in the territory of the country where they are staying shall be exempt from death duties in that country; such property shall, for the assessment of such duty, be considered as being in the country of domicile for tax purposes, subject to the rights of third countries and to the possible application of provisions of international conventions on double taxation.

Any domicile acquired solely by reason of the performance of duties in the service of other international organisations shall not be taken into consideration in applying the provisions of this Article.


These articles apply to members of the Commission, the Council and the European Court of Justice, the European Investment Bank and the European Central Bank.

If, for example, a person who was resident in Italy, or in another European country, takes up a position at the European Central Bank or ECB, he remains tax resident in Italy, or in another European country of prior residence, even though he will in fact be living in Frankfurt.

However, he is not required to pay any tax in Italy on income received at the ECB as it is exempt on the basis of Article 12 of the Protocol.

If, on the other hand, a person while resident in Belgium took up the post of official of the European Commission and transferred his registered residence to Italy, the Italian Revenue Agency with interpello 5 of 2018 and with interpello 7 of 2018 declared that the official remains with tax domicile in Belgium, even if he then transferred his residence to Italy, because that was his country of residence at the time he took up the post, as provided for by Article 13 of the above-mentioned Protocol.

Obviously, the salary paid by the European Commission is exempt from national taxation as provided for in Article 12 of the Protocol.

Moreover, the official, in this specific case, has no obligation to declare in Italy even on foreign-source income received as an employee in Belgium in the first five months of the year, prior to his appointment as a European official (having, moreover, already declared and paid tax in Belgium on that income) as he must be considered ex lege tax resident in Belgium.

The official’s spouse is also exempt from tax declaration obligations in Italy as he does not have a source of income from his own professional activity. If, on the other hand, the official’s spouse had carried out his or her own professional activity in Italy, he or she would be considered to be tax resident in Italy and required to declare the income received.






INTERNATIONAL ORGANISATIONS such as the UN or United Nations, WBG or World Bank, IMF or International Monetary Fund


As far as other international organisations are concerned, the general principle of exemption from taxation of income for salaries, emoluments, allowances and pensions received as members/employees of such organisations in the performance of their duties always applies.

Members of these organisations enjoy privileges and immunities on the basis of the Vienna Convention.

Employees of the United Nations (UN), World Bank (WBG) and International Monetary Fund (IMF) are also not taxed on their salaries and are not required to pay taxes in the host country where they work.

The Convention on the Privileges and Immunities of the Members of the UN concluded in New York on 13 February 1946 specifies that:

”The Secretary-General shall determine the categories of officials to whom the provisions of this Article and of Article VII shall apply. He or she shall submit the list to the General Assembly and shall thereafter communicate it to the Governments of all Members. The names of the officials corresponding to these categories shall be communicated periodically to the Governments of the Members.
Section 18
The officers of the Organisation
(a) shall enjoy immunity from jurisdiction in respect of acts performed by them in their official capacity (including words and writings);
(b) shall be exempt from all taxes on salaries and emoluments paid by the Organisation;…”

Attention should be paid to the fact that this exemption applies to specific officials determined by the Secretary General and also to which States have made it enforceable (Italy made it enforceable by Law 1318/57).


As far as the WORLD BANK is concerned, Article VII, Section 9(b) of the Bank’s Statute states that:

“No tax shall be levied on or in respect of salaries and emoluments paid by the Bank
to executive directors, deputies, officers or employees of the Bank who are not local citizens, local subjects or other local citizens.”

This provision has full force and effect in the United States under the Bretton Woods agreements.

US citizens working at these institutions are not exempt from taxation, but a system of facilitation by the employer is applied so as not to create salary disparities.

The exemption situation also generally extends to tax monitoring obligations, although the Italian Revenue Agency has specified that it applies to individuals working abroad at international organisations with which Italy has ratified the Conventions and whose tax residence in Italy is determined ex lege.

Obviously, the exemptions do not extend to income, emoluments, interest and dividends received other than salaries received as members of international organisations.

A recent Answer No. 93/2022 of the Italian Revenue Agency has, moreover, clarified in the specific case of a German citizen employed by an organisation in Italy, who owned real estate and financial assets outside the Italian territory such as: real estate, current accounts, savings accounts, supplementary pensions, life insurance, although not registered in the National Register of the Population Resident in Italy as he was exempted from the Agreement in place with the Organisation, he was required to fill in the RW panel and to pay indirect taxes such as IVIE and IVAFE:


“These are therefore taxes which are not of a ‘direct’ nature even though the relevant
liquidation takes place through the submission of the tax return. Ne
It follows that, as they do not constitute direct taxes, they do not fall within the
referred to in subparagraph (d) of paragraph 1 of Clause 11 of the Schedule to the Agreement.
In the present case, although the Applicant is a German national, he benefits from the
the aforesaid Clause 11 of exemption from any form of direct taxation on both the
income received by the Centre and on any income from foreign sources of which he is the beneficiary
during the period of employment at the Centre (on the ground that he is not a ‘permanent
resident), having their habitual residence and the seat of their business and
social interests in our country for the greater part of the tax period, as from
2020, he must be considered tax resident in Italy and, therefore, subject to
taxed in our country for all other income not falling under the aforementioned
exemption regime as well as in relation to the obligation to pay IVIE and IVAFE.”


Even more complicated is the situation when the employee retires because he risks losing all exemption benefits on the pension itself. In fact, the Italian Revenue Agency considers that at the time of retirement all the privileges provided for by ratified international agreements lapse, except for the possibility of asserting agreements against double taxation, and that the pension is taxable in Italy and is taxed according to ordinary rules. It would be advisable in this case to assess where it is best to receive the pension.


The analysis showed how complex the situation is for employees of international organisations and how it has to be seen in all personal details and from different points of view because, even if there are exemptions, one has to look in detail at the different particularities and exceptions that often make it necessary to consult a professional to clarify and dispel doubts.




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In particular, for employees of international organisations, exemptions obviously do not extend to income, emoluments, interest and dividends received outside the salaries received as members of international organisations.

The legal and tax profile of this category is very specific, and with regard to different incomes and assets from different countries or in the country of performance, special attention and expertise is required.

In this regard, for financial income, specific knowledge is required, and a special threshold of care is required, so much so that many financial intermediaries reject opening banking and investment positions with them due to the compliance complications required.

We have these specific practices and can also support you with these needs, including the W-8BEN form required by financial intermediaries for US-related positions.

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