Source: IRM 21.8.1.2.16.3 (10-01-2018)

1. What are tax treaties and why do they matter?

The United States has income tax treaties with several foreign countries. These agreements allow residents of foreign countries to be taxed at reduced rates or exempted from U.S. income tax on specific types of income they receive from sources within the United States. Tax treaties can also provide benefits for U.S. citizens or residents (refer to Publication 54).

Example: A tax treaty may allow a foreign artist to perform in the United States and earn a certain amount of income without paying U.S. income tax.

2. How can tax treaties affect foreign individuals visiting the U.S.?

In some instances, tax treaties allow foreign individuals from treaty countries to visit the United States, practice their profession, and earn income without paying U.S. income tax, within certain limits and timeframes.

Example: A professor from a treaty country may be allowed to teach in the United States for a limited period and earn a specific amount of income without being subject to U.S. income tax.

3. Where can I find information on tax treaty provisions?

Publication 901, U.S. Tax Treaties, contains information on treaty provisions relating to various types of income.

4. How can I access individual country treaties?

Taxpayers and their representatives can access individual country treaties on the IRS website (www.irs.gov) by searching for “Tax Treaties.”

5. Are there any special cases for tax treaties?

Yes. The U.S.S.R. income tax treaty remains in effect for the following members of the Commonwealth of Independent States: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan.

In 1992, a separate income tax treaty was established with Russia, followed by Ukraine in 2001, and Kazakhstan in 2003.

Understanding tax treaties is crucial for both U.S. taxpayers and foreign residents involved in international transactions. These treaties help to clarify tax obligations and ensure that all parties are aware of their responsibilities. By becoming familiar with the tax treaty provisions that apply to your situation, you can better navigate the complex world of international taxation.