How U.S. tax treaties help taxpayers

At a glance

Some countries have agreements with the U.S. that can help avoid double taxation and clarify what’s taxable.

No one wants to be taxed twice on the same income, right? That’s where a tax treaty can make a big difference. What is a tax treaty? These are agreements that the U.S. has with several foreign countries to align tax laws and resolve issues of double taxation. U.S. tax treaties benefit two categories of people and businesses:

  • Residents of foreign countries earning income or doing business in the United States
  • U.S. taxpayers who are earning income or doing business in other countries.

We’ll focus on the second example as our tax advisors have helped thousands of U.S. expats take advantage of tax treaties when they file their taxes each year.

Tax treaty basics

Not all tax treaties are alike—some offer more benefits than others. Plus, not all countries have a tax treaty with the United States. Check out the list at the bottom of this page to see the applicable IRS treaty information.

Among other safeguards, treaties can define what income is taxable and determine if you can take a tax credit, tax exemption or a reduced rate of tax. Additionally, a tax treaty can provide tax advantages for your retirement savings. For example, U.S. expats working in England can exclude their contributions to a qualified U.K. pension scheme from taxable income on their U.S. tax return thanks to the U.S.-U.K. tax treaty.

What if there is no treaty? Or what if a certain type of income is not covered? In that case, you must pay taxes on that income in the same manner and at the same rate as one normally would per the instructions on their U.S. tax return.

Residency and tax treaties

What if you’re a resident of both the United States and another country under each country’s tax laws? You can still claim the benefits under an income tax treaty. The treaties contain provisions that help settle claims of residence.

Claiming tax treaty benefits: How H&R Block can help

If a tax treaty allows you to modify, reduce, or eliminate your tax liability, you’ll need to complete Form 8833 to properly disclose such information on your U.S. tax return.

You can trust our tax advisors’ expertise to guide you through your expat return, so you don’t pay too much in taxes. Let H&R Block’s Expat Tax Services team help you today.

A
Armenia
Australia
Austria
Azerbaijan


B
Bangladesh
Barbados
Belarus
Belgium
Bulgaria


C
Canada
China
Cyprus
Czech Republic


D
Denmark


E
Egypt
Estonia


F
Finland
France


G
Georgia
Germany
Greece


H
Hungary


I
Iceland
India
Indonesia
Ireland
Isreal
Italy


J
Jamaica
Japan


K
Kazakhstan
Korea
Kyrgyzstan


L
Latvia
Lithuania
Luxembourg


M
Malta
Mexico
Moldova
Morocco


N
Netherlands
New Zealand
Norway


P
Pakistan
Philippines
Poland
Portugal


R
Romania
Russia


S
Slovak Republic
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland


T
Tajikistan
Thailand
Trinidad
Tunisia
Turkey
Turkmenistan


U
Ukraine
Union of Soviet Socialist Republics (USSR)
United Kingdom
United States Model
Uzbekistan


V
Venezuela

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