INTM860820 - European Union: exemption of staff

Officials or other servants of the European Union are exempt from United Kingdom taxes on salaries, wages and emoluments and pension paid to them by the Union, provided they were first employed by any EU institution before 1 January 2021. They are instead liable to a tax for the benefit of the Union (`Union tax’), which is deducted at source by the European Union body which makes the payment.

The European institutions which employ officials and other servants are the European Union, the European Council, the European Parliament, the European Court of Justice, and the European Court of Auditors.

The exemption also applies to

• the president of the European Council, the members of the European Commission
• the Judges, Advocates - General, the Registrar and the Assistant Rapporteurs of the European Court of Justice
• the staff of the European Investment Bank, the European Investment Fund and the European Central Bank.

If the official or other servant was first employed by an EU institution after 31 December 2020 their salary and pension payments made by an EU institution are not exempt from UK tax. If their EU employer deducts Union tax on salaries, wages and pensions, no foreign tax credit relief will be available under the unilateral relief provisions as the Union tax is an internal tax, not a national tax.