Lagarde’s £298,675 salary, plus $53,593 in bonuses is untaxed as she is an official of an international institution. She is even entitled to an annual pay rise on her five-year contract.

Her financial package is greater than that of US president Barack Obama who pays taxes.

Lagarde was the French finance minister before taking over as managing director of the IMF following the resignation of Dominique Strauss-Kahn, who resigned in disgrace over sexual harassment allegations.

The IMF boss cause international outrage after she suggested beleaguered Greeks might do well to pay their taxes.

A tax-free income applies to nearly all United Nations employees. Article 34 of the Vienna convention on diplomatic relations of 1961, signed by 187 states, declares: “A diplomatic agent shall be exempt from all dues and taxes, personal or real national, regional or municipal.”

The clause is in place ostensibly to attract talent from the private sector, however most senior employees are recruited from government posts anyway.

The ruling has been subject to widespread criticism.

During the 1944 economic conference at Bretton Woods, where the IMF was created, American and British politicians disagreed over salaries for the bureaucrats. British delegates, including the economist John Maynard Keynes, considered the American proposals for salaries to be “monstrous”, but lost the argument.