Tax Treaties

The United States maintains tax treaties with a large number of foreign governments. Under these tax treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate (or are exempt from U.S. taxes) on certain items of income they receive from sources within the United States.

These reduced rates and exemptions vary among nations and specific items of income. Under these same tax treaties, residents or citizens of the United States are taxed at a reduced rate (or are exempt from foreign taxes) on certain items of income they receive from sources within foreign countries.

Most income tax treaties contain what is known as a "saving clause" which prevents a citizen or resident of the United States from using the provisions of a tax treaty in order to avoid taxation on U.S. source income.

If the tax treaty does not cover a particular kind of income, or if there is no treaty between the specific nation and the United States, the U.S. citizen must pay tax on the income in the same way and at the same rates shown in the instructions for the applicable U.S. tax return.

Many of the individual states of the United States tax income which is sourced in their states. Therefore, you should consult the tax authorities of the state from which you derive income to find out whether any state tax applies to any of your income. Some states of the United States do not honor the provisions of tax treaties.

The United States maintains tax treaties with the following countries:

For more information on U.S. tax treaties, visit the IRS and the Department of the Treasury.