I saw this job posting yesterday and did a virtual double take:
Highlighting is mine. Is this true? If so, why? (And if anyone here is qualified/interested in the job send me an email and I’ll forward you the whole thing including contract info)
http://www.50years.org/ejn/v4n3/tax.html
From the IOI Act…
Section 3. Pursuant to regulations prescribed by the Commissioner of Customs with the approval of the Secretary of the Treasury, the baggage and effects of alien officers and employees of international organizations, or of aliens designated by foreign governments to serve as their representatives in or to such organizations, or of the families, suites, and servants of such officers, employees, or representatives shall be admitted (when imported in connexion with the arrival of the owner) free of customs duties and free of internal-revenue taxes imposed upon or by reason of importation.
Why it’s so I can’t really say though…
Wow! What a freakin’ scam. And people get worked up over the “Congress gets great retirement but doesn’t pay anything in glurge”.
Individuals with diplomatic status or who work for certain international bodies are exempt from paying taxes in the USA just like American diplomats are exempt from paying taxes in other countries. Just the way it is as a matter of convention. I do not think the USA wants their diplomats to be taxed by the host countries.
I used to date a woman who had diplomatic passport and a card from the State Department exempting her from paying taxes. It saved me quite a lot of money. We did have some incidents like the time in a small town in Maryland where the woman in the small store went into a ballistic rant about “people who didn’t pay taxes”.
Um, no, it is not a scam any more than American diplomats not paying taxes abroad are a scam. And if you want to rant or debate this is not the forum for that.
Sailor, I can understand the “diplomatic” portion, although I’d say that whether working for the IMF or World Bank is truly diplomatic work is debatable. What I don’t understand is American citizens working in the USA and not paying taxes. Isn’t the theory behind not taxing diplomats or foreign nationals that they have their own tax liabilities back home, so it would be, in essence, double taxation?
Actually, the section you’re quoting has to do with the fact that people who work for the International Bank for Reconstruction and Development (the correct name of the World Bank), or the International Monetary Fund, or the United Nations, are allowed to bring their baggage into the United States without having it checked by Customs, and without having to pay any duties and taxes on whatever they bring into the country.
And, it’s not quite correct that World Bank employees don’t pay any taxes. My father was a division chief in the IBRD, and he still had to pay local property taxes, sales tax, motor vehicle tax, etc. He did not have to pay US income tax, but this is because these organizations pay these taxes to the IRS as a lump sum for all of their international employees. So, in fact the employee’s salary is basically what his net salary would be after paying US income tax. Of course, the salaries at the IBRD and IMF are pretty good, and there are a lot of other benefits (like paid home leave every two years, more vacation days than the US average, good pension and health benefits). That’s one of the reasons it is really hard to get a job there. There are tons of applications for every job opening, but also a quota system determining how many people from any one country may be employed by these organizations at one time.
However, there are guidelines in effect to prevent nepotism. For instance, I was prohibited from working or even interning at the IBRD or IMF while my father or any other member of my family were working there
I think the rulings on tax benefits and other stuff were originally banged out during the Bretton Woods Conference in 1944 and 1945.
One should also remember that the IBRD is almost, but not quite, a bank like any other. Basically they provide loans to countries at low interest rates, mostly for big projects related to improving infrastructure. Project specialists from the IBRD visit these countries to determine if these projects are feasible, and most importantly, if they will be profitable. The IBRD does expect these loans to be paid back, and it is out to make a profit every year (and it certainly does). The IBRD is NOT a charity.
Like I mentioned in my post above, it only seems as though these people aren’t paying any taxes. In fact the IBRD, IMF and UN pay large amounts of money to the US government every year, which are considered to be the tax payments for their employees. If I recall correctly, the UN was threatening to stop these payments because the US is way behind in paying what it owes the UN. It is also incorrect that these employees are subject to income tax in the country they come from. So, there is no need to protect against double taxation. My father paid neither German nor US income tax while he was working at the IBRD.
The place to debate that would be GD, not here. The fact is that a number of international bodies enjoy that recognition. I suppose that if the USA chose to not recognize it the bodies would just move to some other country.
No, I believe the main reason is a matter of independence and reciprocity and convention.
I would also think that the salaries offered already take the fact into account so that the take-home salary is about the same. In other words, it is probably not the employee who is getting more money but the body who employs him. If the employess of the UN are exempt from paying X% they would have to pay in taxes that means the UN can pay them X% less and use the money for other things.
Yep, you guessed it. They use the money to pay the host country of these organizations (the US) what it owes them.