Article 19: Government Service
United Nations Model Double Taxation Convention between Developed and Developing Countries (2017 Update)
Article 19
Government Service
1.(a) Salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of rendering the services.
2.(a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b) However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.
3 The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages, pensions, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.
OECD Model Tax Convention on Income and on Capital (2017 Update)
Article 19
Government Service
a) Salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of rendering the services.
2 a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
2 b) However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
3 The provisions of Articles 15, 16, 17, and 18 shall apply to salaries, wages, pensions, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.
Article 19 Bibliography
Brauner, Yariv. “United States: The Saving Clause, Green Card Holders and Article 19” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2015 (Vienna: Linde, 2016) 285 https://perma.cc/UBE9-QA7W
Hall, Cameron, ‘The Diplomatic and Government Service Provisions of the OECD MTC: A Case for Their Continued Efficacy’ (2014) 42 Intertax 36 <https://www.kluwerlawonline.com/abstract.php?area=Journals&id=TAXI2014004>
Lang, Michael. “Article 19(2): The Complexity of the OECD Model Can Be Reduced” (2007) Bull Intl Tax’n 17.
Martha, Rutsel SJ, Tax Treatment of International Civil Servants, (Martinus Nijhoff 2010) https://perma.cc/ND5X-647L
Pistone, Pasquale. “Government Service (Article 19 OECD Model Convention)” in Michael Lang et al, eds, Source Versus Residence: Problems Arising from the Allocation of Taxing Rights in Tax Treaty Law and Possible Alternatives (Austin: Wolters Kluwer Law & Business, 2008) 283 https://perma.cc/6GU5-HGX4
Article 19 Cases
Bundesfinanzhof (Federal Fiscal Court), I B 196/03, 7 April 2004 (Germany).
Clifford A Abrahamsen and Sole K Abrahamsen v Commissioner of Internal Revenue, 142 TC No 22 (2014).
Cloutier v The Queen, 2003 TCC 58.
Consuelo T Caba v United States, 27 April 2001, 2001-1 USTC (CCH) 50 (United States).
Corte Suprema di Cassazione (Supreme Court), 941, 16 January 2009 (Italy).
Finanzgericht Berlin-Brandenburg (Tax Court, Berlin-Brandenburg), 6 K 6382/03, 2 February 2005, Jurion RS, 2005, 19685 (Germany).
Hof van Cassatie/Cour de Cassation (Supreme Court), AR F.01.0076.N, 4 March 2004, Jurisprudence Fiscale, 2004, 8, 715 (Belgium).
Hof van Cassatie/Cour de Cassation (Supreme Court), F.09.0073.F, 4 June 2010, Fiscale jurisprudentie, 2012, 2012/5, 22 (Belgium).
Hof van Cassatie/Cour de Cassation (Supreme Court), F.12.0128.N, 10 October 2014, Fiscale jurisprudentie, 2015, 480, 378 (Belgium).
John Travers v Sean Siochain – Inspector of Taxes, 24 June 1994, [1994] 3 IR 199 (Ireland).
Verwaltungsgerichtshof (Supreme Administrative Court), 2005/15/0135, 20 February 2008 (Austria).
Verwaltungsgerichtshof (Supreme Administrative Court), 2007/13/0088, 17 October 2007 (Austria).
Verwaltungsgerichtshof (Supreme Administrative Court), 93/15/0199, 22 February 1996 (Austria).
Verwaltungsgerichtshof (Supreme Administrative Court), 94/15/0128, 21 March 1996, VwSlg, 1996, 7077 F (Austria).