U.S. Income Tax Treaties — The Limitation on Benefits Article (Portfolio 936)
U.S. Income Tax Treaties – The Limitation on Benefits Article discusses in detail the limitation on benefits (LOB) article of U.S. income tax treaties.
The United States is a party to numerous income tax treaties with foreign countries. In order to enjoy the benefits of a U.S. income tax treaty, a person must satisfy a number of requirements, including residence in one of the treaty countries. Residence alone, however, is not sufficient. The United States is very concerned about “treaty shopping,” and thus most U.S. income tax treaties, including all modern U.S. income tax treaties, include a “LOB” article. The purpose of the LOB article is to determine whether a resident of a treaty country has a sufficient connection with that country to justify entitlement to treaty benefits.
RELATED REPORT: Base Erosion and Anti Abuse Tax BEAT
This report breaks down the rules of the BEAT and provides a look into what to expect in the coming months.
Table of Contents
II. The LOB Article in the 2006 U.S. Model Treaty
III. Avoiding Disqualification Under an LOB Article
IV. Limitations Outside of a Treaty
V. History of the LOB Article in U.S. Income Tax Treaties
VI. Future of the LOB Article
To learn more about this Portfolio, Request a Demo
Roberts and Holland LLP