U.S. Income Tax Treaties — Provisions Relating Only to Individuals (6870)

Tax Management Portfolio, U.S. Income Tax Treaties — Provisions Relating Only to Individuals, No. 6870, focuses on the treatment in U.S. income tax treaties of cross-border income derived by individuals for the performance of employment services, as directors' fees, in his or her capacity as an entertainer or sportsman, for the performance of government service or as a student or trainee, as well as payments received as a pension, social security payment, an annuity, alimony or child support. To view this Portfolio, visit Bloomberg Tax for a free trial.

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Description

Tax Management Portfolio, U.S. Income Tax Treaties — Provisions Relating Only to Individuals, No. 6870, focuses on the treatment in U.S. income tax treaties of cross-border income derived by individuals for the performance of employment services, as directors' fees, in his or her capacity as an entertainer or sportsman, for the performance of government service or as a student or trainee, as well as payments received as a pension, social security payment, an annuity, alimony or child support.

This Portfolio covers provisions in U.S. income tax treaties relating only to individuals and, where possible, the policy considerations that explain the variations from treaty to treaty. Particular attention is paid to widely-held notions of international tax fairness as reflected in U.S. model treaties and other model treaties, and to the provisions of the various bilateral income tax treaties to which the United States is a party. The ultimate goal of this Portfolio is to educate practitioners about the benefits available under provisions in U.S. income tax treaties that relate only to individuals, and the practical contexts in which they arise.

With respect to estate and gift tax treaties, see 837 T.M., Non-Citizens — Estate, Gift and Generation-Skipping Taxation (Estates, Gifts, & Trusts Series), and 6896 T.M., U.S. Estate and Gift Tax Treaties.

This Portfolio may be cited as Williamson, 6870 T.M., U.S. Income Tax Treaties — Provisions Relating Only to Individuals.


Authors

R. Mark Williamson, Esq.

R. Mark Williamson, Partner, Alston & Bird LLP, Atlanta, Georgia. B.M., cum laude, Louisiana State University (1981); M.M., North Texas State University (now University of North Texas) (1983); J.D., with highest honors, Florida State University (1991); Order of the Coif; Executive Editor, Florida State University Law Review; Adjunct Professor of Law, Georgia State University (2006); Adjunct Professor of Law, University of Wisconsin-Madison (1995); Member, Wisconsin and Georgia Bars; Faculty, State Bar of Georgia Estate Planning Institute, State Bar of Georgia Fiduciary Law Institute, State Bar of Georgia Basic Fiduciary Practice Seminar, Georgia Federal Tax Conference; Recipient, 1997 Trusts & Estates Magazine “Best Young Author” Award (for “Economics of Prepaying Wealth Transfer Taxes” with Jeffrey Pennell); Trustee, Georgia Federal Tax Conference; Board of Directors, Atlanta Estate Planning Council; Past Chair, Atlanta Bar Association Estate Planning and Probate Section; Past Chair, State Bar of Georgia Fiduciary Law Section; President and Board Chair, Georgia Lawyers for the Arts; Fellow, American College of Trust and Estate Counsel.

Table of Contents

Detailed Analysis
I. Introduction
A. Scope of Portfolio
B. Role of Tax Treaties
C. Model Tax Treaties
1. U.S. Model Treaties
2. OECD and UN Model Treaties
II. Residency, Tie-Breaker Rules, and the Saving Clause
A. Overview
B. Residency
1. In General
2. Model Treaties
3. In-Force Treaties
C. Tie-Breaker Rules
1. In General
2. Model Treaties
3. In-Force Treaties
D. Saving Clause
1. In General
2. Model Treaties
a. General Rule
b. Exceptions to the Saving Clause
(1) Exceptions Available to All U.S. Citizens and Residents
(2) Additional Exceptions Available to Temporary U.S. Residents
3. In-Force Treaties
III. Provisions Relating Only to Individuals
A. Overview
B. Income from the Performance of Services
1. In General
2. Model Treaties Generally
3. Performance of Independent Personal Services
a. Model Treaties
(1) 1996 U.S. Model Treaty
(2) 2006 U.S. Model Treaty
(3) 2016 U.S. Model Treaty
b. In-Force Treaties
4. Dependent Personal Services
a. Comparison to Independent Personal Services Provisions
b. Model Treaties
c. In-Force Treaties
C. Government Service
1. In General
2. Model Treaties
3. In-Force Treaties
D. Directors’ Fees
1. In General
2. Model Treaties
3. In-Force Treaties
E. Entertainers and Sportsmen
1. In General
2. Model Treaties
3. In-Force Treaties
F. Students, Business Apprentices, Teachers, and Researchers
1. In General
2. Model Treaties
3. In-Force Treaties
G. Pensions and Social Security Benefits
1. In General
2. Model Treaties
a. Pensions
b. Social Security
c. Cross-Border Pension Plan Earnings
d. Pension Plan (Fund) Contributions
3. In-Force Treaties
H. Annuities
1. In General
2. Model Treaties
3. In-Force Treaties
I. Alimony and Child Support
1. In General
2. Model Treaties
3. In-Force Treaties
IV. Summary and Conclusion

Working Papers

Table of Worksheets
Worksheet 1 Preamble to 2016 U.S. Model Income Tax Convention
Worksheet 2 2016 U.S. Model Treaty
Worksheet 3 2006 U.S. Model Treaty
Worksheet 4 German Consular Employees MAP Agreement, Ann. 2010-2, 2010-2 I.R.B. 271