# International organisation - US taxes



## Humblefish (Jul 19, 2015)

My wife and I are both American citizens, currently living in the US.

My wife is currently under consideration for a job with an International Organisation (About us | European Bioinformatics Institute) in the UK. We have read on the organisation's website that employees are not subject to UK taxation or social security.

And it *appears* the same may hold true for US taxes: https://www.irs.gov/individuals/int...-government-or-international-organization-fit

Except we would still have to pay US social security & medicare tax, just not federal income tax.

Can anyone here confirm this is the case?


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## WestCoastCanadianGirl (Mar 17, 2012)

Hiya!

I've moved this to the Expat Tax branch as you'll likely get faster/better informed responses here than in the UK branch.

Good luck to you and your wife and your new adventures!


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## Humblefish (Jul 19, 2015)

Thank you! Sorry for posting in the wrong forum.


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## Nel&Jimmy (Jul 25, 2016)

hi Humblefish,

I'm British, living in the US and working for a UK company. This has been VERY complicated when it came to filing for US & UK taxes!! My hero has been Mary-Heather Styles of Transatlantic Tax - I'd recommend contacting her and saving yourselves a lot of stress!
http://http://transatlantictax.com/
Nel


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## Bevdeforges (Nov 16, 2007)

Read the page very carefully again. Those working for an International Organization are not subject to withholding for US taxes - but their income is still reportable and (usually) taxable as usual but subject to the Foreign Earned Income Exclusion and all.



> For U.S. citizens, compensation received for services performed as an employee of an international organization *is includible in their gross income and is reportable on their U.S. federal income tax returns, even though the compensation may not be subject to withholding* of U.S. federal income taxes.


You may not be subject to US Social Security. Depending on the organization, you may have an NGO social insurance scheme which will exempt you from the FICA system. However, most international organizations have loads of assistance available to US employees because it is a big issue.
Cheers,
Bev


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## gairloch (Jun 24, 2011)

Bev is correct. A quote form the link you provided is below. The paragraph below (in bold) states you are liable for US income tax. This falls in line with the IRS iron clad rule of for US citizens/permanent residents - that their world-wide income is reportable and subject to tax. If you work in the UK your income here is usually reportable for tax to HMRC (i.e the UK verison of the IRS) for tax purposes. 

Services for International Organization
Compensation paid for services performed within or outside of the United States by an employee of an international organization, as defined in Internal Revenue Code section 7701(a)(18), is not considered to be wages for purposes of withholding U.S. federal income taxes.
The term “employee” as used in the preceding sentence includes not only an employee who is a citizen or resident of the United States, but also an employee who is a nonresident alien individual. The term “employee” also includes an officer.
For U.S. citizens,* compensation received for services performed as an employee of an international organization is includible in their gross income and is reportable on their U.S. federal income tax returns, *even though the compensation may not be subject to withholding of U.S. federal income taxes. Furthermore, compensation received by a U.S. citizen for services performed within the United States as an employee of a foreign government is subject to self-employment tax.


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## Humblefish (Jul 19, 2015)

Thank you all. I assume if she is the successful candidate, then EMBL-EBI will help her work out the specifics. I'm just trying to figure out what her take home will be, worst case scenario, so we know what kind of salary to negotiate for.

I guess it would be best to assume she only qualifies for the Foreign Earned Income Exclusion as tax relief, so I will research that now. Yay for being an American citizen!


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## gairloch (Jun 24, 2011)

Every other citizen in the world does not have to file taxes to their home country, just their country of residence. yea, USA...


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## Bevdeforges (Nov 16, 2007)

Take a look at IRS Publication 54 on filing from overseas. I believe they do mention the issue of International Organizations in there, but even if they don't, they explain how the FEIE and Foreign Tax Credit works.
Cheers,
Bev


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