Can a taxpayer use 0% (Art XX pensions https://www.irs.gov/pub/irs-trty/india.pdf) of India-USA treaty for an Indian citizen who lives and works full time here in Canada under permanent resident status (immigration), versus 15% rate on periodic (XVIII CAN-USA treaty)? Since it’s an inheritance and won’t be taxed by Canada (or India), it’s worthwhile for taxpayer to file over-w/h US refund-claim 1040NR vs the strategy of not doing so employed by taxpayers claiming 15% FTC on T1 using only 1042-S.
Can such person claim India treaty benefit (and not violate LOB)? My underlying question is do treaties look only at residence or also citizenship?
treaty resident or citizen (pension 0% vs 15%)
Moderator: Mark T Serbinski CA CPA
Re: treaty resident or citizen (pension 0% vs 15%)
The pension article in that treaty refers to "residents" on the contracting states, not citizens. So, the taxation of a US pension will be based on where the person lives according to US, Canada and Indian competent authorities.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing