2012-Ģ��ƵAT-240

Ģ��ƵAT Held or Ģ��ƵDT Pronouncements

Ģ��ƵAT considered an appeal by the Secretary-General and a cross-appeal by Ms Johnson. Ģ��ƵAT agreed with Ģ��ƵDT��s analysis and held that the decision to deny the staff member a refund of the US income tax on her salary and emoluments was unlawful. Ģ��ƵAT recalled that the US grants foreign tax credits in respect of income tax paid by one of its nationals or permanent residents to another State to relieve the effects of double taxation. Ģ��ƵAT held that the exclusion of such credits as payment would not only contravene the principle of equality of treatment among staff members if staff members from the United States were deprived of the benefit of reimbursement for using such tax credits, but also the principle of equity among Member States irrespective of whether they choose to grant, or not to grant, an income tax exemption to their nationals, as these two principles form the basis for the staff assessment system in respect of taxation. Ģ��ƵAT dismissed the appeal and the cross-appeal and affirmed the Ģ��ƵDT judgment.

Decision Contested or Judgment/Order Appealed

Ģ��ƵDT Judgment: The Applicant contested the decision not to reimburse her for the staff assessment on her salary and emoluments. Ģ��ƵDT considered that the utilization of foreign tax credits by United States taxpayers constitutes ��a payment method�� to settle tax obligations and that the staff member, having discharged her tax obligation on income she earned by means of a foreign tax credit, ��must be regarded both as having been subject to US taxation on income received from the Organization, and as having discharged that tax obligation��. Ģ��ƵDT ordered the Secretary-General to refund the Applicant the amount of the staff assessment on her salaries and emoluments.

Legal Principle(s)

A staff member (who is a United States taxpayer) can discharge his/her US income tax liability on Ģ��Ƶ salary and emoluments by utilizing foreign tax credits. Accordingly, the Organization must grant a refund of the US income tax on his/her Ģ��Ƶ salary and emoluments.

Outcome

Appeal dismissed on merits

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The judgment summaries were generally prepared in English. They were translated into French and are being reviewed for accuracy of the translation.

Applicants/Appellants

Johnson

Entity

Case Number(s)

Tribunal

Registry

Date of Judgement