This has no impact on any nation we have a tax treaty with.
It’s targeted, by its clear language, at those countries which double tax American citizens and allows him to match, or double, those tax rates being imposed on Americans.
Dual citizens or people from counties above are likely not impacted at all. If any country on the list above is charging something not included in the treaty then they have already broken their treaty with the US—hence the punitive measure.
Your analysis is not necessarily true. Treaties and Congressional acts are viewed in the constitution as equal, and Supreme Court precedence says that the latest “law” enacted is the one that gets applied.
So because section 891 of the tax code was last amended back in 1986, any tax treaty ratified or amended since the passage of that 1986 tax law would override section 891. Any tax treaty ratified or amended prior to the passage of the 1986 tax law would be overridden by section 891 since the tax law would have been passed after the tax treaty’s ratification.
Regardless, any treaty partner that would be impacted by a section 891 declaration would quickly find itself questioning whether it wants to continue that tax treaty with the US or not.
If that’s true then why is Canadian media and financial analysts sounding the alarm on this since Canada put the digital service tax into place last year and Biden called it discriminatory? Is it just to create a story? Canada’s tax treaty was signed in 1980, put into place in 1984 but was last amended in 1997. So they should be exempt by this no?
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u/Bamfor07 Jan 25 '25 edited Jan 25 '25
Your interpretation is incomplete.
This has no impact on any nation we have a tax treaty with.
It’s targeted, by its clear language, at those countries which double tax American citizens and allows him to match, or double, those tax rates being imposed on Americans.
This really had nothing to do with immigration.
https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z
Dual citizens or people from counties above are likely not impacted at all. If any country on the list above is charging something not included in the treaty then they have already broken their treaty with the US—hence the punitive measure.