Introduction to International Income Tax Treaties
By Anthony Diosdi IntroductionThe major purpose of an income tax treaty is to reduce or eliminate the impacts of international double taxation by residents of one treaty country from sources within another treaty country. Because tax treaties often reduce U.S. and/or foreign tax consequences associated with a cross-border transaction, anyone involved in international transactions or commerce must consider utilizing an applicable income tax treaty. This article is designed to provide the reader with a broad overview as to how an income tax treaty can be used by U.S. residents and nonresidents to reduce their exposure to global income taxation. Many of the income tax treaties to which the United States is a party are similar to the United States Model Income Tax Convention of November 15, 2006 (“U.S. Model Treaty”).…