Tag Archives: US tax treaty

US Tax Treaties Should Reflect The 21st Century And Not The World Of 100 Years Ago

Prologue

The rules of taxation should follow changes in society. The ordering of society should NOT be hampered by the rules of taxation!

As the world has become more digital, companies can carry on business from any location. Individuals have become more mobile. Multiple citizenships, factual residences and legal tax residencies are not unusual. It has become clear that the rules of international tax as reflected in tax treaties (as they apply to both corporations and individuals) are in need of reform.

The purpose of this post is to identify two specific areas where US tax treaties are rooted in the world as it was one hundred years ago and NOT as it is today.

First: The “Permanent Establishment” clause found in US and OECD tax treaties

Second: US Citizenship-based taxation which the US exports to other countries through the “saving clause” found in almost all US tax treaties

Each of these will be considered.

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The common law "revenue rule": From whence it came to where it's going

Introduction – What is the Revenue Rule?


The “Revenue Rule” can be overridden by statute of by treaty. The United States is attempting to override the “Revenue Rule” through changes to tax treaties. Because the United States imposes worldwide taxation on the residents of other countries, the United States would be advantaged overriding the “Revenue Rule”.
Putting the “Revenue Rule” in historical context. Does the Revenue Rule still matter?
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