The Tax Treaty Saving Clause - 2021 Edition: How the USA exports @CitizenshipTax throughout the world

<p>February 9, 2021 - Participants Include:</p> <p>Dr. Karen Alpert - <a href='http://www.twitter.com/fixthetaxtreaty'>@FixTheTaxTreaty</a></p> <p>Tim Smyth - <a href='http://www.twitter.com/Tpsmyth01'>@Tpsmyth01</a></p> <p>John Richardson - <a href='http://www.twitter.com/expatriationlaw'>@Expatriationlaw</a></p> <p>All US tax treaties include a "<a href='http://citizenshipsolutions.ca/2016/05/26/savings-clause-in-us-tax-treaties-guarantees-us-right-of-taxation-on-residents-and-citizens-of-other-nations/'>saving clause</a>". With respect to individual US citizens, the effect of the "saving clause" is to:</p> <p>1. First, guarantee that US citizens abroad who are dual tax residents will be subject to double taxation; and</p> <p>2. Second, relax that double taxation in certain specific areas.</p> <p>For example, Article XXIX of the <a href='https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/united-states-america-convention-consolidated-1980-1983-1984-1995-1997.html'>Canada US Tax Treaty</a> includes:</p> <p>"2. Except as provided in paragraph 3, nothing in the Convention shall be construed as preventing a Contracting State from taxing its residents (as determined under Article IV (Residence)) and, in the case of the United States, its citizens (including a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of ten years following such loss) and companies electing to be treated as domestic corporations, as if there were no convention between the United States and Canada with respect to taxes on income and on capital.</p> 3. The provisions of paragraph 2 shall not affect the obligations undertaken by a Contracting State: <ul class="lst-none"><li>(a) under paragraphs 3 and 4 of Article IX (Related Persons), paragraphs 6 and 7 of Article XIII (Gains), paragraphs 1, 3, 4, 5, 6(b) and 7 of Article XVIII (Pensions and Annuities), paragraph 5 of Article XXIX (Miscellaneous Rules), paragraphs 1, 5 and 6 of Art