Wages and Pensions
Paid by a Foreign
Government
Wages, salaries, pensions, and annuities paid by the governments of the following
countries to their residents who are present in the United States as nonresident aliens
generally are exempt from U.S. income tax. The conditions under which the income is exempt
are stated for each of the countries listed.
Exemption under U.S. tax law. Employees of foreign countries who do
not qualify under a tax treaty provision and employees of international organizations
should see if they can qualify for exemption under U.S. tax law.
If you work for a foreign government in the United States, your foreign government
salary is exempt from U.S. tax if you perform services similar to those performed by U.S.
government employees in that foreign country and that foreign government grants an
equivalent exemption. If you work for an international organization in the United States,
your salary from that source is exempt from U.S. tax. See chapter 10 of Publication 519
for more information.
Australia
Salaries, wages, and similar income, including pensions, paid by Australia, its
political subdivisions, agencies, or authorities to its citizens (other than U.S.
citizens) for performing governmental functions as an employee of any of the above
entities are exempt from U.S. income tax.
Austria
Wages, salaries, similar income, and pensions and annuities paid from public funds of
Austria, its political subdivisions, or its local authorities, to citizens of Austria for
performing governmental functions as an employee are exempt from U.S. tax.
However, this exemption does not apply to payments for services performed in connection
with a trade or business carried on by Austria or its political subdivisions or local
authorities.
Barbados
Income, including a pension, paid from the public funds of Barbados, or its political
subdivisions or local authorities, to a citizen of Barbados for performing governmental
functions is exempt from U.S. income tax.
However, this exemption does not apply to payments for services in connection with a
business carried on by Barbados or its political subdivisions or local authorities.
Belgium
Wages, salaries, similar income, and pensions and annuities paid by, or from public
funds of, Belgium, its political subdivisions, or its local authorities, to citizens of
Belgium (or to citizens of countries other than the United States or Belgium who come to
the United States and are employed by Belgium or its political subdivisions or local
authorities) for performing governmental functions are exempt from U.S. tax.
However, this exemption does not apply to payments for services performed in connection
with a trade or business carried on by Belgium or its political subdivisions or local
authorities.
Canada
Wages, salaries, and similar income (other than pensions) paid by Canada or by a
Canadian political subdivision or local authority to a citizen of Canada for performing
governmental functions are exempt from U.S. income tax. This exemption does not apply,
however, to payments for services performed in connection with a trade or business carried
on by Canada or its political subdivisions or local authorities.
Also see Publication 597, Information on the United States - Canada Income Tax
Treaty.
China, People's Republic of
Income, other than a pension, paid by the People's Republic of China or its political
subdivisions or local authorities to an individual for services performed for the paying
governmental body is exempt from U.S. income tax. However, the exemption does not apply to
payments for services performed in the United States by a resident of the United States
who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by the People's Republic of China for services performed for China are
exempt from U.S. income tax unless the recipient is both a citizen and a resident of the
United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by the People's Republic of China or its
subdivisions or local authorities.
Commonwealth of
Independent States
Wages, salaries, and similar income paid by the C.I.S. or a member of the C.I.S. to its
citizens for personal services performed as an employee of a governmental agency or
institution of the C.I.S. or a member of the C.I.S. (excluding local government employees)
in the discharge of governmental functions are exempt from U.S. income tax. For this
purpose, persons engaged in commercial activities are not considered engaged in the
discharge of governmental functions.
Cyprus
Wages, salaries, and similar income, including pensions, annuities, and similar
benefits, paid from public funds of Cyprus to a citizen of Cyprus for labor or personal
services performed as an employee of Cyprus in the discharge of governmental functions are
exempt from U.S. income tax.
Czech Republic
Income, including a pension, paid from the public funds of the Czech Republic, its
political subdivisions, or local authorities to a Czech citizen for services performed in
the discharge of governmental functions is exempt from U.S. income tax. This exemption
does not apply to income paid for services performed in connection with a business carried
on by the Czech Republic, its political subdivisions, or local authorities.
Denmark
Note: See the effective dates of the new treaty under Important
Changes at the beginning of this publication.
New treaty. Income, other than a pension, paid from public funds of
Denmark, its political subdivisions, or local authorities to an individual for services
performed for the paying governmental body in the discharge of governmental functions is
exempt from U.S. income tax. However, the exemption does not apply if the services are
performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid from the public funds of Denmark, its political subdivisions, or local
authorities for services performed for Denmark are exempt from U.S. income tax unless the
recipient is either a resident or citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Denmark, its political subdivisions, or
local authorities.
Former treaty. Wages, salaries, and similar income and pensions paid
by Denmark, or any public authority in Denmark, to individuals living in the United States
are exempt from U.S. income tax. This exemption does not apply to citizens of the United
States or alien residents of the United States.
Egypt
Wages, salaries, and similar income, including pensions, annuities, and similar
benefits, paid from public funds of the Arab Republic of Egypt to a citizen of Egypt (or
to a citizen of another country who comes to the United States specifically to work for
the Government of Egypt) for labor or personal services performed as an employee of the
national Government of Egypt, or any of its agencies, in the discharge of governmental
functions are exempt from U.S. income tax.
This exemption does not apply to U.S. citizens or to alien residents of the United
States. The exemption also does not apply to payments for services performed in connection
with a trade or business carried on by Egypt or any of its agencies.
Estonia
Income, other than a pension, paid by or from public funds of Estonia, its political
subdivisions, or local authorities to an individual for services performed as an employee
for the paying governmental body in the discharge of governmental functions is exempt from
U.S. income tax. However, the exemption does not apply if the services are performed in
the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by or from the public funds of Estonia, its political subdivisions, or
local authorities for services performed for Estonia are exempt from U.S. income tax
unless the recipient is both a resident and citizen of the United States.
Finland
Income, other than a pension, paid by Finland, its political subdivisions, statutory
bodies, or local authorities to an individual for services performed for the paying
governmental body is exempt from U.S. income tax. However, the exemption does not apply to
payments for services performed in the United States by a U.S. resident who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Finland for services performed for Finland are exempt from U.S. income
tax unless the recipient is a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Finland or its political subdivisions,
statutory bodies, or local authorities.
France
Income, including pensions, paid by the French Government or a local authority thereof
to an individual in the United States for services performed for France (or for a local
authority of France) in the discharge of governmental functions is exempt from U.S. tax.
This exemption does not apply to a person who is both a resident and citizen of the United
States and not a French national.
This exemption does not apply to any income or pensions paid because of services (or
past services) performed in connection with a business carried on by the French Government
(or a local authority thereof).
Germany
Wages, salaries, and similar income and pensions paid by Germany, its Laender, or
municipalities, or their public pension funds are exempt from U.S. income tax if paid to
individuals other than U.S. citizens and other than individuals admitted to the United
States for permanent residence.
Greece
Wages, salaries, and similar income and pensions paid by Greece or its subdivisions to
individuals living in the United States for services rendered to Greece or its
subdivisions are exempt from U.S. income tax. This exemption does not apply to citizens of
the United States or alien residents of the United States.
Hungary
Income (other than a pension) paid by the Republic of Hungary or its political
subdivisions for labor or personal services performed for the paying governmental body is
exempt from U.S. tax. However, the exemption does not apply to payments for services
performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a resident of the United States only to perform the services.
Pensions paid by Hungary for services performed for Hungary are exempt from U.S. income
tax unless the recipient is both a citizen and a resident of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Hungary or its subdivisions.
Iceland
Wages, salaries, and similar income, including pensions and similar benefits, paid by
or from public funds of the Republic of Iceland, a political subdivision, or a local
authority to a citizen of Iceland (other than a U.S. citizen or one admitted to the United
States for permanent residence) for labor or personal services performed for Iceland or
its political subdivisions or local authorities in the discharge of governmental functions
are exempt from U.S. tax.
India
Income, other than a pension, paid by India, its political subdivisions, or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply if the services are
performed in the United States by a U.S. resident who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by India for services performed for India are exempt from U.S. tax unless
the individual is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by India, its subdivisions, or local authorities.
Indonesia
Income, other than a pension, paid by Indonesia, its political subdivisions, or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply if the services are
performed in the United States by a U.S. resident who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Indonesia for services performed for Indonesia are exempt from U.S.
tax.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Indonesia, its subdivisions, or local
authorities.
Ireland
Income, other than a pension, paid by Ireland or its political subdivisions or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Ireland for services performed for Ireland are exempt from U.S. income
tax unless the recipient is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by Ireland or its subdivisions or local authorities.
Israel
Wages, salaries, and similar income, including pensions and similar benefits, paid from
public funds by the national government of Israel or its agencies, for services performed
in the discharge of governmental functions, are exempt from U.S. income tax. This
exemption does not apply to citizens of the United States or alien residents of the United
States.
Italy
Income, other than a pension, paid by Italy or by an Italian political or
administrative subdivision or local authority to an individual for services performed for
the paying governmental body is exempt from U.S. income tax. However, the exemption does
not apply to payments for services performed in the United States by a resident of the
United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
The spouse and dependent children of an individual, however, are not subject to the
second restriction if that individual is receiving exempt income for governmental services
performed for Italy and that individual does not come under either of the restrictions.
Pensions paid by Italy for services performed for Italy are exempt from U.S. income tax
unless the recipient is both a citizen and a resident of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Italy or its subdivisions or local
authorities.
Jamaica
Income, other than a pension, paid by the Government of Jamaica or its political
subdivisions or local authorities for personal services performed for the paying
governmental body is exempt from U.S. income tax.
This exemption does not apply to payments for services performed in the United States
by an individual who is a citizen and resident of the United States.
Pensions paid by Jamaica for services performed for Jamaica generally are exempt from
U.S. income tax. However, if the recipient of the pension is a citizen and resident of the
United States and was a U.S. citizen at the time the services were
performed, the pension is taxable in the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Jamaica or its subdivisions or local
authorities.
Japan
Salaries, wages, and similar income, including pensions and similar benefits, paid by
Japan or out of funds to which Japan or any of its local authorities contributes to an
individual who is a national of Japan (other than a U.S. citizen or one admitted to the
United States for permanent residence) for labor or personal services performed as an
employee of the Government of Japan or any of its local authorities are exempt from U.S.
income tax.
Kazakstan
Income, other than a pension, paid by Kazakstan, or its subdivisions or local
authorities to an individual for government services is exempt from U.S. tax. However, the
exemption does not apply if the services are performed in the United States by a U.S.
resident who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident solely for the purpose of performing the services.
These exemptions do not apply to income for services performed in connection with a
business.
Pensions paid by Kazakstan, or its subdivisions or local authorities for services
performed for Kazakstan is exempt from U.S. tax unless the individual is both a resident
and citizen of the United States.
Korea, Republic of
Wages, salaries, and similar income, including pensions and similar benefits, paid from
public funds of the Republic of Korea to a citizen of Korea (other than a U.S. citizen or
an individual admitted to the United States for permanent residence) for services
performed as an employee of Korea discharging government functions are exempt from U.S.
income tax.
Latvia
Income, other than a pension, paid by or from public funds of Latvia, its political
subdivisions, or local authorities to an individual for services performed as an employee
for the paying governmental body in the discharge of governmental functions is exempt from
U.S. income tax. However, the exemption does not apply if the services are performed in
the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by or from the public funds of Latvia, its political subdivisions, or
local authorities for services performed for Latvia are exempt from U.S. income tax unless
the recipient is both a resident and citizen of the United States.
Lithuania
Income, other than a pension, paid by or from public funds of Lithuania, its political
subdivisions, or local authorities to an individual for services performed as an employee
for the paying governmental body in the discharge of governmental functions is exempt from
U.S. income tax. However, the exemption does not apply if the services are performed in
the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by or from the public funds of Lithuania, its political subdivisions, or
local authorities for services performed for Lithuania are exempt from U.S. income tax
unless the recipient is both a resident and citizen of the United States.
Luxembourg
Note: See the effective dates of the new treaty under Important
Changes at the beginning of this publication.
New treaty. Income, other than a pension, paid by Luxembourg, its
political subdivisions, or local authorities to an individual for services performed for
the paying governmental body is exempt from U.S. income tax. However, the exemption does
not apply if the services are performed in the United States by a resident of the United
States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Luxembourg, its political subdivisions, or local authorities for
services performed for Luxembourg are exempt from U.S. income tax unless the recipient is
both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Luxembourg, its political subdivisions,
or local authorities.
Former treaty. Wages, salaries, and similar income, and pensions,
annuities, and similar benefits paid by Luxembourg, its political subdivisions, or its
compulsory social security funds for services performed for Luxembourg or its political
subdivisions in discharge of governmental functions are exempt from U.S. income tax. These
amounts are exempt only if they are paid to individuals other than U.S. citizens or
individuals admitted to the United States for permanent residence.
Mexico
Income, other than a pension, paid by Mexico, its political subdivisions, or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply if the services are
performed in the United States by a U.S. resident who either:
- Is a U.S. national, or
- Did not become a resident of the United States solely for purposes of performing the
services.
Pensions paid by Mexico, its political subdivisions, or local authorities for services
performed for the paying governmental body are exempt from U.S. income tax unless the
individual is both a resident and national of the United States.
These exemptions do not apply to income or pensions connected with commercial or
industrial activities carried on by Mexico, its political subdivisions, or local
authorities.
Morocco
Wages, salaries, and similar income, including pensions and similar benefits, paid from
public funds of the Kingdom of Morocco to a citizen of Morocco (other than a U.S. citizen
or an individual admitted to the United States for permanent residence) for labor or
personal services performed for Morocco or for any of its political subdivisions or local
authorities in the discharge of governmental functions are exempt from U.S. income tax.
Netherlands
Income, other than a pension, paid by the Netherlands, its political subdivisions, or
local authorities to an individual for services performed for the paying governmental body
is exempt from U.S. income tax. However, the exemption does not apply if the services are
rendered in the United States and the individual is a U.S. resident who either:
- Is a U.S. national, or
- Did not become a U.S. resident solely for the purpose of performing the services.
Pensions paid by the Netherlands for services performed for the Netherlands are exempt
from U.S. income tax unless the individual is both a resident and national of the United
States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by the Netherlands, its political subdivisions, or
local authorities.
New Zealand
Income (other than pensions) paid by the Government of New Zealand, its political
subdivisions, or local authorities for services performed in the discharge of governmental
functions is exempt from U.S. income tax. However, the income is not exempt if the
services are performed in the United States by a U.S. citizen resident in the United
States or by a resident of the United States who did not become a resident only to perform
the services.
Pensions paid by New Zealand in consideration for past governmental services are exempt
from U.S. income tax unless paid to U.S. citizens resident in the United States.
These exemptions do not apply to payments for services performed in connection with any
trade or business carried on for profit by the Government of New Zealand (or its
subdivisions or local authorities).
Norway
Wages, salaries, and similar income, including pensions and similar benefits paid by or
from public funds of Norway or its political subdivisions or local authorities to a
citizen of Norway for labor or personal services performed for Norway or any of its
political subdivisions or local authorities in the discharge of governmental functions are
exempt from U.S. income tax.
Pakistan
Income, including pensions and annuities, paid to certain individuals by or on behalf
of the Government of Pakistan or the Government of a Province in Pakistan or one of its
local authorities for services performed in the discharge of functions of that Government
or local authority is exempt from U.S. income tax. To be exempt from tax, these payments
must be made to citizens of Pakistan who do not have immigrant status in the United
States. This exemption does not apply to payments for services performed in connection
with any trade or business carried on for profit.
Philippines
Wages, salaries, and similar income, including pensions, annuities, and similar
benefits, paid from public funds of the Republic of the Philippines to a citizen of the
Philippines (or to a citizen of another country other than the United States who comes to
the United States specifically to work for the Government of the Philippines) for labor or
personal services performed as an employee of the national Government of the Philippines
or any of its agencies in the discharge of governmental functions are exempt from U.S.
income tax.
Poland
Wages, salaries, and similar income, including pensions, annuities, and similar
benefits, paid from public funds of Poland to a citizen of Poland (other than a U.S.
citizen or one admitted to the United States for permanent residence) for labor or
personal services performed as an employee of the national Government of Poland in the
discharge of governmental functions are exempt from U.S. income tax.
Portugal
Income, other than a pension, paid by Portugal, its political or administrative
subdivisions, or local authorities to an individual for services performed for the paying
governmental body is exempt from U.S. income tax. However, the exemption does not apply to
payments for services performed in the United States by a U.S. resident who either:
- Is a U.S. national, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Portugal for services performed for Portugal are exempt from U.S.
income tax unless the recipient is a resident and national of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by Portugal or its political or administrative
subdivisions, or local authorities.
Romania
Wages, salaries, and similar income, including pensions, annuities, and similar
benefits, paid from public funds of Romania to a citizen of Romania (other than a U.S.
citizen or one admitted to the United States for permanent residence) for labor or
personal services performed as an employee of the national Government of Romania in the
discharge of governmental functions are exempt from U.S. income tax.
Russia
Income, other than a pension, paid by Russia, its republics, or local authorities to an
individual for government services is exempt from U.S. tax. However, the exemption does
not apply if the services are performed in the United States by a U.S. resident who
either:
- Is a U.S. citizen, or
- Did not become a U.S. resident solely for the purpose of performing the services.
Pensions paid by Russia, its republics, or local authorities for services performed for
Russia is exempt from U.S. tax unless the individual is both a resident and citizen of the
United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business.
Slovak Republic
Income, including a pension, paid from the public funds of the Slovak Republic, its
political subdivisions, or local authorities to a Slovak citizen for services performed in
the discharge of governmental functions is exempt from U.S. income tax. This exemption
does not apply to income paid for services performed in connection with a business carried
on by the Slovak Republic, its political subdivisions, or local authorities.
South Africa
Income, other than a pension, paid by South Africa or its political subdivisions or
local authorities to an individual for services performed for the paying governmental body
is exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by South Africa for services performed for South Africa are exempt from
U.S. income tax unless the recipient is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by South Africa or its subdivisions or local
authorities.
Spain
Income, other than a pension, paid by Spain, its political subdivisions, or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Spain, its political subdivisions, or local authorities for services
performed for Spain are exempt from U.S. tax unless the individual is a citizen and
resident of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Spain, its subdivisions, or local
authorities.
Sweden
Income, other than a pension, paid by Sweden, its political subdivisions, or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply if the services are
performed in the United States by a U.S. resident who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident solely for the purpose of performing the services.
Pensions paid by Sweden, its political subdivisions, or local authorities for services
performed for Sweden are exempt from U.S. tax unless the individual is both a resident and
citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by Sweden, its political subdivisions, or local
authorities.
Switzerland
Income, other than a pension, paid by Switzerland or its political subdivisions or
local authorities to an individual for services performed for the paying governmental body
is exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Switzerland for services performed for Switzerland are exempt from
U.S. income tax unless the recipient is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by Switzerland or its subdivisions or local
authorities.
Thailand
Income, other than a pension, paid by Thailand or its political subdivisions or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Thailand for services performed for Thailand are exempt from U.S.
income tax unless the recipient is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by Thailand or its subdivisions or local
authorities.
Trinidad and Tobago
Wages, salaries and similar income and pensions, annuities, and similar benefits paid
by or from the public funds of the Government of Trinidad and Tobago to a national of that
country for services performed for Trinidad and Tobago in the discharge of governmental
functions are exempt from U.S. tax.
Tunisia
Income, other than a pension, paid by Tunisia, its political subdivisions, or local
authorities to a Tunisian citizen for personal services performed in the discharge of
governmental functions is exempt from U.S. income tax.
Pensions paid by Tunisia, its political subdivisions, or local authorities for services
performed for Tunisia are exempt from U.S. income tax unless the recipient is a U.S.
citizen.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Tunisia, its political subdivisions, or
local authorities.
Turkey
Income, other than a pension, paid by Turkey or its political subdivisions or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Turkey for services performed for Turkey are exempt from U.S. income
tax unless the recipient is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a business carried on by Turkey or its subdivisions or local authorities.
Ukraine
Note: See the effective dates of the new treaty under Important
Changes at the beginning of this publication. For information on the old provisions,
see Commonwealth of Independent States.
Income, other than a pension, paid from public funds of Ukraine, its political
subdivisions, or local authorities to an individual for services performed in the
discharge of governmental functions is exempt from U.S. income tax. However, the exemption
does not apply if the services are performed in the United States by a resident of the
United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by, or by funds created by, Ukraine, its political subdivisions, or local
authorities for services performed for Ukraine are exempt from U.S. income tax unless the
recipient is both a resident and citizen of the United States.
These exemptions do not apply to income or pensions for services performed in
connection with a trade or business carried on by Ukraine, its political subdivisions, or
local authorities.
United Kingdom
Income, other than a pension, paid by the United Kingdom to employees for services
performed for the United Kingdom is exempt from U.S. income tax. The exemption does not
extend to employees of a political subdivision or local authority of the United Kingdom.
The exemption does not apply if the services are performed in the United States and the
recipient is both a citizen and a resident of the United States.
Pensions paid by the United Kingdom or its political subdivisions or local authorities
to individuals for services performed in the discharge of governmental functions are
exempt from U.S. income tax, unless the recipient is both a citizen and a resident of the
United States.
These exemptions do not apply to payments or pensions for services performed in
connection with a business carried on by or on behalf of the United Kingdom.
Venezuela
Income, other than a pension, paid by Venezuela, its political subdivisions, or local
authorities to an individual for services performed for the paying governmental body is
exempt from U.S. income tax. However, the exemption does not apply to payments for
services performed in the United States by a resident of the United States who either:
- Is a U.S. citizen, or
- Did not become a U.S. resident only to perform the services.
Pensions paid by Venezuela, its political subdivisions, or local authorities for
services performed for Venezuela are exempt from U.S. income tax unless the recipient is
both a resident and citizen of the United States.
These exemptions do not apply to payments or pensions for services performed in
connection with a business carried on by Venezuela, its political subdivisions, or local
authorities.
Explanation
of Tables
The paragraphs below describe the tables that follow and provide additional information
that may make the tables more useful to you.
In the tables, you will see the term New Treaty; the effective date of a new
treaty is shown under Important Changes at the beginning of this publication.
Table 1
This table lists the income tax rates on such income as interest, dividends, capital
gains, rents, and royalties. The income code numbers shown in this table are the same as
the income codes on Form 1042-S, Foreign Person's U.S. Source Income Subject to
Withholding.
Interest. If you are a nonresident alien who receives interest that
is not effectively connected with the conduct of a U.S. trade or business, you do not
include the interest in income if it is paid on deposits with banks, on accounts
or deposits with certain financial institutions, or on certain amounts held by insurance
companies. These amounts are exempt from U.S. tax even though they are considered to be
income from a U.S. source. Also exempt from U.S. tax (although considered from U.S.
sources) is certain portfolio interest on obligations issued after July 18, 1984. See
Publication 519 for more information.
Table 2
This table lists the different kinds of personal service income that may be fully or
partly exempt from U.S. income tax. You must meet all of the treaty
requirements before the item of income can be exempt from U.S. income tax. The income code
numbers shown in this table are the same as the income codes on Form 1042-S, Foreign
Person's U.S. Source Income Subject to Withholding.
Independent personal services. The term independent personal
services generally means services you perform for your own account if you receive the
income and bear the losses arising from those services. Examples of these services are
those provided by physicians, lawyers, engineers, dentists, and accountants who perform
personal services as sole proprietors or partners.
Dependent personal services. Dependent personal services usually are
those you perform for someone else as an employee.
Table 3
This table lists the countries that have tax treaties with the United States. Some
treaties are published in the Internal Revenue Bulletins (I.R.B.) and the Cumulative
Bulletins (C.B.), which contain official matters of the Internal Revenue Service. The
column headed Citation shows the number of the I.R.B. or C.B. and the page on
which a particular treaty may be found.
Regulations implementing some treaties were issued as Treasury Decisions (T.D.). Other
treaties are explained by Treasury explanation. The fifth column lists the T.D. numbers
and the I.R.B. or C.B. in which each T.D. or Treasury explanation is printed.
You can subscribe to the I.R.B. or buy volumes of the C.B. from the Government Printing
Office or you are welcome to read them in most Internal Revenue Service offices. Many
public libraries and business organizations subscribe to a commercial tax service that
publishes the treaties and regulations or explanations.
How To Get Tax Help
You can get help with unresolved tax issues, order free
publications and forms, ask tax questions, and get more information from the IRS in
several ways. By selecting the method that is best for you, you will have quick and easy
access to tax help.
Contacting your Taxpayer Advocate. If
you have attempted to deal with an IRS problem unsuccessfully, you should contact
your Taxpayer Advocate.
The Taxpayer Advocate represents your interests and concerns within the IRS by
protecting your rights and resolving problems that have not been fixed through normal
channels. While Taxpayer Advocates cannot change the tax law or make a technical tax
decision, they can clear up problems that resulted from previous contacts and ensure that
your case is given a complete and impartial review.
To contact your Taxpayer Advocate:
- Call the Taxpayer Advocate at 1-877-777-4778.
- Call the IRS at 1-800-829-1040.
- Call, write, or fax the Taxpayer Advocate office in your area.
- Call 1-800-829-4059 if you are a TTY/TDD user.
For more information, see Publication 1546, The Taxpayer Advocate Service of the
IRS.
Free tax services. To find out what services are available, get
Publication 910, Guide to Free Tax Services. It contains a list of free tax
publications and an index of tax topics. It also describes other free tax information
services, including tax education and assistance programs and a list of TeleTax topics.
Personal computer. With your personal computer and modem, you can access the IRS
on the Internet at www.irs.gov. While visiting our web site, you can select:
- Frequently Asked Tax Questions (located under Taxpayer Help & Ed) to
find answers to questions you may have.
- Forms & Pubs to download forms and publications or search for forms and
publications by topic or keyword.
- Fill-in Forms (located under Forms & Pubs) to enter information
while the form is displayed and then print the completed form.
- Tax Info For You to view Internal Revenue Bulletins published in the last few
years.
- Tax Regs in English to search regulations and the Internal Revenue Code (under United
States Code (USC)).
- Digital Dispatch and IRS Local News Net (both located under Tax
Info For Business) to receive our electronic newsletters on hot tax issues and news.
- Small Business Corner (located under Tax Info For Business) to get
information on starting and operating a small business.
You can also reach us with your computer using File Transfer Protocol at ftp.irs.gov.
TaxFax Service. Using the phone attached to your fax machine, you can receive
forms and instructions by calling 703-368-9694. Follow the directions from the
prompts. When you order forms, enter the catalog number for the form you need. The items
you request will be faxed to you.
Phone. Many services are available by phone.
- Ordering forms, instructions, and publications. Call 1-800-829-3676 to
order current and prior year forms, instructions, and publications.
- Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
- TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059
to ask tax questions or to order forms and publications.
- TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages
covering various tax topics.
Evaluating the quality of our telephone services. To ensure that IRS
representatives give accurate, courteous, and professional answers, we evaluate the
quality of our telephone services in several ways.
- A second IRS representative sometimes monitors live telephone calls. That person only
evaluates the IRS assistor and does not keep a record of any taxpayer's name or tax
identification number.
- We sometimes record telephone calls to evaluate IRS assistors objectively. We hold these
recordings no longer than one week and use them only to measure the quality of assistance.
- We value our customers' opinions. Throughout this year, we will be surveying our
customers for their opinions on our service.
Walk-in. You can walk in to many post offices, libraries, and IRS offices to
pick up certain forms, instructions, and publications. Also, some libraries and IRS
offices have:
- An extensive collection of products available to print from a CD-ROM or photocopy from
reproducible proofs.
- The Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative
Bulletins available for research purposes.
Mail. You can send your order for forms, instructions, and publications to the
Distribution Center nearest to you and receive a response within 10 workdays after your
request is received. Find the address that applies to your part of the country.
- Western part of U.S.:
Western Area Distribution Center
Rancho Cordova, CA 95743-0001
- Central part of U.S.:
Central Area Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
- Eastern part of U.S. and foreign addresses:
Eastern Area Distribution Center
P.O. Box 85074
Richmond, VA 23261-5074
CD-ROM. You can order IRS Publication 1796, Federal Tax Products on CD-ROM, and
obtain:
- Current tax forms, instructions, and publications.
- Prior-year tax forms, instructions, and publications.
- Popular tax forms which may be filled in electronically, printed out for submission, and
saved for recordkeeping.
- Internal Revenue Bulletins.
The CD-ROM can be purchased from National Technical Information Service (NTIS) by
calling 1-877-233-6767 or on the Internet at www.irs.gov/ cdorders. The
first release is available in mid-December and the final release is available in late
January.
IRS Publication 3207, Small Business Resource Guide, is an interactive CD-ROM
that contains information important to small businesses. It is available in mid-February.
You can get one free copy by calling 1-800-829-3676. |
