Completing Form 8833 Treaty-Based Return Position Disclosure: Claiming Income Tax Treaty Benefits

The United States has current income tax treaties with over 60 countries. The treaties are intended to eliminate or reduce double income taxation or to reduce U.S. income tax liability by asserting a claim to a treaty benefit.

Benefits are available to nonresident aliens on U.S. federal income taxes, dual residents, and U.S. citizens and residents for foreign country income taxes. A foreign person claiming a tax benefit under a U.S. income tax treaty may need to report the position on IRS Form 8833, Treaty-Based Return Disclosure Under Section 6114 or 7701(b).

Section 6114 requires that “any taxpayer who takes the position that a treaty of the United States overrules (or otherwise modifies) an internal revenue law of the United States shall disclose (in such manner as the Secretary may prescribe) such position.” The disclosure must include specific information about the treaty, including the article of the treaty that applies and the Internal Revenue Code Section changed by the claimed treaty position.

Listen as the panel provides comprehensive guidance on how to read and interpret key income tax treaty provisions, report treaty-based positions on Form 8833, obtain U.S. resident certification (Form 8802) to claim reduction or exemption from foreign income taxation under a treaty, and complete Forms W-8BEN and W-8BEN-E to establish an exemption from U.S. withholding taxes.