CCH Learning Center

Description:
The adoption of a territorial or credit system by individual countries represents a unilateral solution to the international double taxation problem in the sense that it is created by individual countries. Tax treaties, on the other hand, represent bilateral solutions to the international double taxation problem since they are created by and apply to both of the countries that are parties to the agreement.

This Course covers the elements of tax treaties using the 2006 U.S. Model Treaty as the example. It explains the operation of U.S. tax treaties in mitigating international double taxation through tax reductions and exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. It also explains the disclosure rules, which require any taxpayer that claims the benefits of a treaty by taking a tax return position that is in conflict with the Internal Revenue Code to disclose that position.

At the completion of this Course, the student will be able to:

• Describe the purpose of income tax treaties in the tax regimes of countries
• Identify common treaty provisions in the 2006 U.S. Model Treaty
• Define the so-called "tie-breaker" rule when a person qualifies as a resident in more than one country
• Describe the rules by which any taxpayer claiming the benefits of a treaty by taking a tax return position that is in conflict with the Internal Revenue Code must disclose the position