Is my embassy salary exempt from tax in the host country?
Usually, but the exemption is narrower than people expect. It attaches to the official salary paid to you by the sending state, under the specific exemptions that cover accredited staff and the government-service article of the treaty. It does not attach to you as a person. So the official pay can sit outside the host country's net while everything else you receive stays inside it. The practical step is to read the words of the provision that applies to your posting and your grade, then keep the payslips showing which payer the money came from. That evidence is what an assessment turns on later.
Do I have to declare my rental income back home while posted abroad?
Almost certainly yes. The provisions that exempt an official salary say nothing about private income, so rent from a property at home is taxed under the ordinary rules that would apply if you had never left. The confusion usually comes from filing one return as though the exemption covered the whole year. It does not. The cleaner approach is to treat the streams separately: the official salary under the exemption, and the rental profit computed in the ordinary way with its own expenses and its own local filings. Where the property sits in a third country, a further return may be due there.
Does the diplomatic exemption cover my spouse's local job?
No. Where a spouse takes employment with a local employer, that pay is ordinary employment income in the host country and is generally taxed and withheld there. The household then holds two different positions under one roof, and they have to be filed as two positions. It also affects the family's residence picture, because local employment is a connecting factor of exactly the kind residence tests look for. We usually map the household's income by payer first, then decide the filing pattern for each person rather than for the family as a unit.
Which country counts me as resident while I am on posting?
Both may say so, and that is the common bind: the posting country treats accredited staff as not resident, while the home country treats a posting as a continuation of residence rather than a departure. The answer comes from the residence rules of each state, then from the treaty tie-breaker if both still claim you. Your accreditation papers, the terms of the posting and where your family lives carry more weight than nights counted anywhere. Get the position written down once and use the same position on both returns, because inconsistent returns are what draws the enquiry.
Do I file at home if my only income is my official salary?
Often yes, even when nothing is taxable. An exemption is a treatment of income, not a release from filing, and in most systems the return is where you claim the treatment and identify the payer. Filing also keeps your residence record continuous, which matters when the posting ends and the year of return has to be split. If you have any private income at all, the return is where the two streams are separated. We would rather file and claim than leave a gap in the record that has to be explained years afterwards.
The host country withheld tax on my official pay, can I recover it?
Sometimes, and the route is a claim rather than a complaint. If the government-service article or a specific exemption covers the pay, the withholding was taken on income the host state agreed not to tax, and a repayment claim is made in that state citing the provision and the accreditation. The work is evidential: the payer has to be shown to be the sending state, and your status through the period documented. Where the withholding relates to a period before accreditation, or to private income mixed into the same payroll, that part usually stands.
Is double taxation illegal?
It is legal. Two countries can each have a valid claim on the same income — one because the income arose there, the other because you live there — and nothing prohibits both from exercising it. What exists instead is relief: tax treaties allocate the claim, and domestic law gives a credit for foreign tax paid. The relief is not automatic, though. It is claimed on a return, and unclaimed relief is simply lost. See how double taxation is relieved.
How do you avoid double taxation?
You claim relief once, in the right country, in the right order. Usually the source country taxes first, the residence country then gives a credit for that tax against its own charge on the same income, and a treaty caps the source-country rate. Getting the order wrong is what produces a double charge you then have to unwind. The mechanism differs by income type, which is why we map the whole position before filing either return. See how to avoid double taxation.
