Income Tax Treaty
Bilateral agreement between the US and another country that allocates taxing rights and provides relief from double taxation.
Also called double tax treaty, tax convention, DTA.
An income-tax treaty between the US and a partner country (e.g. France 1994, UK 2001, Germany 1989, Canada 1980, Australia 1982) reduces or eliminates double taxation by allocating taxing rights between the two countries. US citizens are still taxable on worldwide income under the saving clause, but specific treaty articles can re-source income, exempt certain pension distributions, or reduce withholding. A treaty position generally requires Form 8833 disclosure.
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