Not sure if it's common across all tar implementations, but you can use -C to let GNU tar change directories before performing any operation. So this command is equivalent:
$ tar -cC /source/dir . | ssh rhost tar -xvC /dest/dir
FWIW, while tar isn't even a POSIX command, -C is supported by bsdtar[1] (including macOS), AIX tar (confirmed AIX 7.1), and Solaris tar (confirmed Solaris 11.4). Argument ordering and bundling is really funky on AIX and Solaris, though, especially for extraction.
[1] Seems like everybody except OpenBSD has migrated to libarchive's bsdtar, but OpenBSD also supports -C.