International Tax TreatiesInternational Tax Treaties

International tax treaties are agreements between two countries. The purpose of these treaties is to prevent issues such as double taxation and tax evasion. These treaties can also be known as Double Tax Agreements or DTAs. In this article, we will go over the basics of how international tax treaties work.


International tax treaties apply to residents of foreign countries. The treaty will reduce the U.S. tax burden for residents of foreign countries. They do not reduce U.S. taxes for U.S. citizens or residents.


If a foreign resident is eligible for tax treaty utilization, it will wall the foreign resident to be able to be taxed at a reduced rate or to be exempt from taxation. The types of income that are excludable will depend on the treaty between the U.S. and the specific county of residence. The types of income that are excludable will vary from country to country. If the treaty does not cover a certain type of income the resident will be subject to pay income tax according to the instructions set out in Form 140NR.

Special Notes

If you think utilizing a tax treaty may be right for you, there are some additional pointers you should take into consideration. First, your foreign tax authority may require you to provide certification from the U.S. government that you filed an application or tax return. They require this as proof of entitlement to international tax treaty benefits. Second, not all states may participate in tax treaties, so you may be subject to state income tax.

Questions? Want to schedule an appointment? Contact us by clicking here.