Some United Nations consultants haven’t paid taxes on their income, thinking it was exempt. When the tax authorities catch up with them they’ll risk paying back taxes and fines.
As a general rule, foreign UN functionaries are not required to pay local taxes on their income. On the other hand UN consultants must. Over the weekend, Swiss broadcaster RTS, explain the details of a system misunderstood by some. The programme showed an IT consultant, who convinced no tax was due, had paid none. Discovered by Geneva’s tax office, he must now pay CHF 18,500 for income earned in 2012. Contacted by RTS, UN spokesperson Alessandra Vellucci said: “It is up to each person to make sure they fulfill their tax obligations. It’s very clearly written in the UN work rules. There is no ambiguity.”
And the law is clear: consultants on short term or renewable contracts with the UN are subject to income tax.
If the law is clear why are so many slipping through the net? Foreigners coming to Geneva to work for the UN are not issued with regular visas issued by the canton. Instead they receive a legitimation card issued by the Federal Department of Foreign Affairs in Bern. This means they do not need to signal their arrival to the canton. If they did they would be automatically registered with the cantonal tax authorities.
According to RTS, 1,891 consulting contracts were concluded with the UN last year in Geneva. It is impossible to know how many of these have slipped through the tax net.