TN 7 (10-16)
RS 02002.350 Government Employee Rule under the Agreement with Hungary
A. Policy for Vienna Conventions
Nationals of a country who work abroad in the diplomatic or consular services of their home country are exempt, under the Vienna Conventions on Diplomatic Relations and the Vienna Conventions on Consular Relations, from social security coverage and taxes under the laws of the host country unless that exemption was specifically waived. The Conventions, to which both the United States and Hungary are parties, apply to the following:
members of the staff of a diplomatic or consular mission, including the diplomatic; consular, administrative and technical staffs;
dependents of members of those staffs;
the domestic service staffs of those missions; and
under certain conditions, the private servants employed by members of such missions
B. Policy for agreement provisions
The agreement does not affect any exemption provided under the Vienna Conventions. The agreement establishes the following rules for government employees not covered by the Vienna Conventions:
U.S. nationals employed by the U.S. Government in Hungary are subject to U.S. law (Social Security, Federal Employees Retirement System (FERS), or both; or CSRS);
Hungarian nationals employed by the Hungarian Government in the United States are subject to Hungarian law; and
In all other cases, the employee is subject to the laws of the country where the worker performs the work (unless another exception to the territoriality rule applies).
NOTE: For purposes of applying this provision of the agreement, the term U.S. Government employee includes employees of the Federal Government or any of its instrumentalities.
For more information on employees of the Federal Government or any of its instrumentalities, see RS 01802.050.