§893 — Title 26 Internal Revenue Code | U.S. Code

§893 Compensation of Employees of Foreign Governments or International Organizations

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter N— Tax Based on Income From Sources Within or Without the United States › Part II— NONRESIDENT ALIENS AND FOREIGN CORPORATIONS › Subpart D— Miscellaneous Provisions › § 893

Last updated Apr 5, 2026|Official source

Summary

Wages, fees, or salaries paid to employees of foreign governments or international organizations (including diplomats and consular officers) can be kept out of U.S. taxable income if three rules are met: the worker is not a U.S. citizen (or is a citizen of the Philippines), the job is like the work U.S. government employees do abroad, and the foreign government gives the same tax break to U.S. government employees in that country. The Secretary of State must tell the Treasury which countries and job types qualify. The rule does not cover employees of controlled commercial entities (businesses run by a foreign government) or workers whose duties are mainly commercial activities.

Title 26, §893

Internal Revenue Code — Source: USLM XML via OLRC

(a)Wages, fees, or salary of any employee of a foreign government or of an international organization (including a consular or other officer, or a nondiplomatic representative), received as compensation for official services to such government or international organization shall not be included in gross income and shall be exempt from taxation under this subtitle if—

(1)such employee is not a citizen of the United States, or is a citizen of the Republic of the Philippines (whether or not a citizen of the United States); and

(2)in the case of an employee of a foreign government, the services are of a character similar to those performed by employees of the Government of the United States in foreign countries; and

(3)in the case of an employee of a foreign government, the foreign government grants an equivalent exemption to employees of the Government of the United States performing similar services in such foreign country.

(b)The Secretary of State shall certify to the Secretary of the Treasury the names of the foreign countries which grant an equivalent exemption to the employees of the Government of the United States performing services in such foreign countries, and the character of the services performed by employees of the Government of the United States in foreign countries.

(c)Subsection (a) shall not apply to—

(1)any employee of a controlled commercial entity (as defined in section 892(a)(2)(B)), or

(2)any employee of a foreign government whose services are primarily in connection with a commercial activity (whether within or outside the United States) of the foreign government.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1988—Subsec. (c). Pub. L. 100–647 added subsec. (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.