The United States has tax treaties or conventions with many countries. Under these treaties and conventions, Citizens and Residents of the United States who are subject to taxes imposed by the foreign countries are entitled to certain credits, deductions, exemptions, and reductions in the rate of taxes of those foreign countries. If a foreign country with which the United States has a tax treaty imposes a tax on you, you may be entitled to benefits under the treaty.
Treaty benefits generally are designed for U.S. Citizens and U.S. Residents who (currently) reside in the United States. They generally are not available to U.S. Citizens and Residents who do not currently reside in the United States. However, certain treaty benefits and safeguards, such as the nondiscrimination provisions, are available to U.S. citizens residing in the treaty countries. U.S. Citizens and Residents residing in a foreign country may also be entitled to benefits under that country’s tax treaties with third countries.
An examination of the specific treaty and specific treaty article(s) is necessary to determine if one is entitled to a tax credit, tax exemption, reduced rate of tax, or other treaty benefit or safeguard.