Tag Archives: U.S. tax treaty

The interpretation of US Tax Treaties: Domestic law, foreign law or the intent of the treaty

Leave a reply

On August 5, 2016 the United States Court of Appeals for the District of Columbia Circuits issued it’s decision in the Eshel case.
This important case is here:
FRENCH TAXES US COURT REVERSAL 5 AUG 2016 (1)
Information about the history of the case is here which includes:

DC Circ. Chides DOJ For Snub Of US Gov’t In French Tax Row

A D.C. Circuit panel grilled the Department of Justice’s Tax Division on Tuesday for arguing a foreign tax dispute with dual U.S. and French citizens without first seeking input from the U.S. government, saying the case requires the court to interpret international treaties and examine other policy issues.

The court’s decision, authored by Justice Millet concluded with:
Continue reading →

Dual citizenship, the lack of definition of "citizen" in the "Savings Clause" of U.S. Tax Treaties and why these are important

Leave a reply


 
Introduction …
This is a “follow up” to my first post about the “Savings Clause” in the Canada U.S. Tax Treaty. The purpose of that first post was to demonstrate that pursuant to the “Savings Clause”, the Government of Canada has agreed to allow the United States to impose direct taxation on some Canadian citizens who are resident in Canada. The post generated a fascinating discussion about the “Savings Clause” and was widely discussed at the Isaac Brock Society. A subsequent post at the Isaac Brock Society provided greater detail about exactly how, and in what respects, the Government of Canada has agreed that the United States can impose direct U.S. taxation on some Canadian citizens and residents. One obvious conclusion from this discussion is reflected in the comment that:

Next time someone tells me that the tax treaty relieves double taxation, I’ll tell them that it causes it. We have RDSP’s and RESP’s to prove it.

I absolutely agree. Although there are a few specific areas where the Tax Treaty mitigates against double taxation, for the most part, because of the Savings Clause, the U.S. Canada Tax Treaty, does NOT prevent double taxation. By ensuring U.S. taxation of Canadian residents and citizens, the U.S. Canada Tax Treaty guarantees double taxation!
It’s a myth that the tax treaty prevents double taxation. As John F. Kennedy said in his commencement address at Yale University on June 11, 1962:
Continue reading →