The article discusses the exemption for government remuneration found in most double tax agreements and the exemption under domestic legislation for colonial service pensions.
Tax exception for government remuneration
Earnings and pensions of foreign national employees of a foreign government are usually exempt from tax in the country of residence (host country) under the 'Government Services Article' in the appropriate double tax treaty. They are usually taxed in the other country (home country) only. In relation to the exemption for pension income, the pension must relate to services rendered to the foreign government. See also 'Government pensions and residence status' below.1
The 'Government Services Article' is usually Article 19 of a double tax treaty. For commentary on the Organisation for Economic Cooperation and Development (OECD) model tax treaty version of this article, see the OECD website (click 'read online').
From a UK context, this means for example that if a UK national is working for the UK Government in another country, they are subject to UK income tax on their earnings and not subject to tax on
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Web page updated on 17 Mar 2025 17:45