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Tag Archive for tax treaty

U.S. Expats In The UK And Brexit

In a referendum in June 2016, the UK voted to leave the European Union (EU). The result was a surprise to many, as experts had been lining up to say that the UK would be worse off economically if it left. Just over a year on, it’s still a divisive issue in the UK. However the government formally triggered the start of the two year leaving process in March 2017, so it’s definitely going to happen. While heated debate on the pros and cons of staying and leaving still rages among the Brits, many U.S. expats are wondering what the implications for them are. Read more

Roth IRA Taxation For Expats In Canada

The importance of income tax treaties should not be underestimated when considering the U.S. tax implications of living abroad. U.S. and foreign tax laws often fall short of ensuring that U.S. expats are on equal tax footing with their non-expat counterparts. In such case, a relevant tax treaty may be available to pick up the slack. Read more

Tax Treaty Tiebreaker And Reporting: Forms 8938, 8621, 5471

John Richardson

Previously, we have look at the tax treaty tiebreaker and how it relates to taxation of Subpart F and PFIC income as well as eligibility for streamlined offshore procedures. This is another in a series of posts on the tax treaty tiebreaker (which is a standard provision in most U.S. tax treaties).

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Tax Treaty Tiebreaker And Taxation Of Subpart F And PFIC

John Richardson

Before a “Green Card” holder uses the “Treaty Tiebreaker” provision of a U.S. Tax Treaty, he/she must consider what is the effect of using the “Treaty Tiebreaker” on:

A. His/her immigration status under Title 8 (will he/she risk losing the Green Card?)

B. His/her status under Title 26 (will he expatriate himself under Internal Revenue Code S. 7701(b)) and subject himself to the S. 877A “Exit Tax” provisions?

Now, on to the post

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Payments To Foreign Persons And 1042 – March 15 Deadline

The Internal Revenue Service today reminded non-U.S. citizens who may have taxable income, such as international students and scholars who may be working or receiving scholarship funds, that they may have special requirements to file a U.S. tax return.

The IRS also reminded withholding agents — such as payroll professionals or universities — that accurately filed Forms 1042-S help speed any refunds due to their non-U.S. citizen taxpayers. Errors on forms or returns could result in some refunds being delayed.

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Sending Non-Canadian Resident Employees To Canada

Larry Stolberg

Regulation 102 of the Income Tax Act (ITA) requires payroll withholding on income derived by virtue of employment. This applies to, say, a U.S. employer sending its employee to Canada to work on an assignment. Withholding would include income tax and contributions to the Canada Pension Plan (CPP) and Employment Insurance (EI).

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Reporting A “Treaty-Based Position”—Internal Revenue Code S. 6114 Using Form 8833

John Richardson

The United States has many tax treaties with many nations. As a general principle the “savings clause” prevents Americans abroad from having the benefit of treaty provisions. That said, there are situations where a U.S. citizen abroad can benefit from the specific provisions of a specific treaty.

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Part 2: Why Justice Martineau’s Decision Has Handed @ADCSovereignty The Framework For Ultimate Victory – The Importance of “Staying The Course”

Introduction – what this post is about …

I attended the hearing in Vancouver, B.C. on August 4, 5 2015. At that time I wrote a group of posts (here and here) discussing my perception of the hearing. Those posts included expressions of my opinion that Justice Martineau was highly engaged, was working hard on understanding the issues, and was affording all parties a fair hearing. Although, disappointed with his decision (handed down on September 16, 2015), and not agreeing with his conclusions, I reaffirm my sentiments in the previous posts.

This post is more about the “system” than it is about Justice Martineau specifically. In a judicial system, it is possible for “reasonable people” to have “reasonable Read more

Part 1: Justice Martineau Provides @ADCSovereignty The Only Thing Worse Than A Root Canal

This post is Part 1 of my thoughts on Justice Martineau’s decision.

I  left my root canal appointment this afternoon to a message announcing that Justice Martineau had rendered his decision. We did not win round 1. Notice that I did NOT say that the Government won round 1.

Here is the decision:

T-1736-14 decision sept-16-2015

Before, I comment specifically on the decision, I want to be clear on the following points: Read more

BEPS And Planet Mars

NASA recently announced that your name can be put on the planet Mars. This is incredibly great news for the people with good fortunes who are thrilled by the opportunity to gain their foothold in the universe and enhance their fame. However, in another space mission, scientists are attempting to find out if any life exists in other planets.

Think about it. If they indeed were able to find the life on Mars and if the inhabitants there happen to be much more advanced than the humans on earth, they are likely to have a tax law that can tax such inbound activities. Beware and think before you make that tempting decision.

Putting your name on a planet may have its other side. If “cross planet” law applies and Read more

U.S. Law Firms Consulting In India – Trap For The Unwary

International legal and independent professionals consulting in India often have issues receiving funds from their clients in India. India has stringent exchange control regulations contained in the Act called Foreign Exchange Management Act – FEMA. Accordingly all foreign remittances must go through certain procedures. Additionally, Income Tax Department asks for “Tax Residency Certificate” (TRC) from the US service provider so that the treaty benefits can be allowed. If TRC is not produced, the payer must withhold tax from the income remitted to US service provider. This is true regardless of where the services were provided.

Until recently, it was mandatory that TRC issued by foreign tax authority must contain all items required by the government of India in order to exempt any tax withholding Read more

Green Card Holders: Residency In Foreign Country And Treaty Benefits!

Tracking Storm Linus on the weather websites, watching the storm blow around the white stuff all day long, snow piling up 16 inches and more on it’s way, sneaking peeks at the Super Bowl while trying to write up this post- I realized how far we have come–long, long ways from being Green Card holders.

But I do remember that the transition to Green Card holder from a visa holder can be a somewhat exhilarating, somewhat frustrating journey. This process can take a long time and comes with a lot of trials and tribulations.

The tax rules for a green card holder remain fairly the same as a US citizen or a long time US resident for most purposes. The complications come into play when the Green Card Read more

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