I missed this about Lagarde….

Although I did know it, missed making the point:

Ms Lagarde was forced to publish an embarrassing climbdown on her Facebook page over the weekend after being bombarded by hundreds of Greek people who felt insulted by her suggestion that the country’s crisis was partly due to “all these people in Greece who are trying to escape tax”.

However, on Tuesday she had to admit that her $467,940 (£300,000) annual salary and $83,760 of additional allowances are entirely tax-free as the IMF is an international organisation.

An IMF spokesman said: “Salaries, like those in most international organizations, are paid on a lower, net of tax basis to ensure equal pay for equal work regardless of nationality.”

Me, I think it would be interesting to have this work the other way around. Ensure that those who work for these international organisations do not get tax free salaries. Rather, insist, indeed force, them to do their own tax forms (no accountants or assistants!) for country of work, residence and domicile, force them to line up with everyone else for visas and so on. Absolutely insist that they have to live by all the same rules as the little people.

We\’d soon see some red tape bonfires, wouldn\’t we?

12 thoughts on “I missed this about Lagarde….”

  1. Where does she spend most of her work time? Won’t she be on a diplomatic passport of some sort, meaning that she isn’t subject to the tax (or any) laws of the country in which she resides?

    Do French diplomats in foreign embassies pay French taxes on their salaries?

  2. She doesn’t pay taxes. But she doesn’t have diplomatic immunity. If, say, she was to attempt to rape a chambermaid…

  3. I’ve long suggested that Finance Acts should require that for any pension change, the Chancellor of the Exchequer’s pension shall be affected in like manner (ideally that of all MPs), and that every Chancellor should be required to complete all his own tax forms. Himself, with no accountant, no assistance, especially from a special office of HMRC, but suffer exactly the same penalties as everyone else when he gets it wrong.

  4. blokeinfrance

    She’d be allowed to rape a chambermaid scot-free if she could convince the authorities concerned that at the time she was on IMF business (and the IMF refused to waive diplomatic immunity). DSK’s troubles arose because he couldn’t claim that he was actually on IMF business when the alleged rape occurred.

  5. Do French diplomats in foreign embassies pay French taxes on their salaries?

    I suspect they do. I know ours pay British tax, as do the military, regardless of where they are spending their time.

  6. Offshore Observer

    Surely the answer to these international organisations is a passport based method of taxation. That way she would pay French tax based on her nationality.

  7. When I worked for a mobile phone company, I recall a Euro MP trying to to bully the customer service reps to exempt him from VAT. Many phones calls and angry letters were received but I refused to give in to his demands. There is something about bureacrats thinking themselves above the laws that they inflict on the rest of society that annoys me.

  8. The oil companies got this sorted out years ago: employ everyone out of one place for tax purposes (Geneva in my case) and the employees pay taxes there; and the company pays the taxes of whatever shithole you happen to be posted to (in my case Nigeria).

  9. Sorry, but may I explain the rationale behind international orgs (IA’s) taxing internally (the salaries are mostly NOT tax free, they are taxed internally “for the benefit of the organisation”.)

    It’s all about balancing being fair to the employees, and fair to the member states.

    Hosting an IA is already advantageous, since it attracts money being spent locally. Let’s look at the 3 scenarios:

    1. Taxation to host nation. Fair to employees (all are in same regime) UNLESS the IA has multiple seats in different countries. Not fair to member states – the host country mints it, and the non-hosting member states get nothing.

    2. Taxation to home countries. Fair to the member states, since they get tax at the normal rates. Absolutely unfair to the employees, since the Swedes, Belgians, Germans etc. get creamed, whereas the Swiss and others pay little. Also, how on earth do you deal with the Swiss? The bulk of taxation in CH is to the Cantons and to the Communes. If you’re not resident in either, who do you pay the tax to? On the other end of the scale, imagine working for e.g. WIPO in Geneva – the salaries are hardly EU Commission level, and paying taxes at Scandawegian rates in Geneva would leave you with next to nothing to live on – a garret appartment and le pot noodle for you, my son!.

    3. Internal taxation. The only compromise that doesn’t cause enormous strife between the member states or cause huge disparities between employees of different nations.

  10. Fred, here’s Locke on the subject. Actually on the ruling class in this case Brussels et al, who will
    “exempt themselves from the obedience to the laws which they make, and suit the law, both in its making and and its execution, to their own private Wish, and thereby come to have a distinct Interest from the rest of the Community, contrary to the end of Society and Government.”

    You fucked it up, you expect us peasants to pay for it. Fuck you.

  11. Well so she gets cash in a way you dont like.
    But does this mean that she was wrong? That the Greeks do pay their taxes?

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