Tax treaty: meaning and how countries use it

Tax treaties are also called double taxation agreements or conventions. They set rules for items such as business profits and interest. The IRS says residents of treaty countries may be taxed at a reduced rate, or be exempt from US tax, on certain US income, and that these rates and exemptions vary by country and by type of income.

To use a treaty, a person normally has to be a resident of one of the two countries for treaty purposes. The other country may ask for a certificate of residence. In the United States, a treaty position that reduces tax may need to be disclosed on Form 8833.

Treaties have limits. Most US treaties contain a saving clause that keeps the US right to tax its own citizens and residents. The IRS also notes that some US states do not honor treaty provisions.

Not to be confused with

Totalization agreement. A totalization agreement deals with social security taxes, not income tax.
Tie-breaker rule. The tie-breaker rule is one part of a treaty that settles residence for dual residents.

Sources

United States income tax treaties - A to ZOfficial guidance
Tax treaties can affect your income taxOfficial guidance
Apply for a certificate of residence or letter of confirmationOfficial guidance

Countries covered: General
Sources: 3 sources
Tax year: Current rules as checked
Review: Not professionally reviewed
Sources checked November 8, 2026

Not to be confused with

Sources

Related