Going back to the Savary case (TC Summary 2010-150) where Savary , a US citizen, was...

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Accounting

Going back to the Savary case (TC Summary 2010-150) where Savary, a US citizen, was a flight attendant that lived and worked inParis. The Tax Court reviewing Art 24 (Relief from Double Taxation)in the US-France DTC, concluded that France should give a creditfor the US taxes on Savary's wages. Since France had alreadydeclined to provide a credit for the US tax, Savary was subject todouble taxation by both contracting states on USD 23,321 (the TaxCourt allowed Savary to exclude under sec 911 as foreign earnedincome USD 14,415).
Is this a correct reading of the Art 24? Art 24 has a 3-biterule similar to the 3-bite rule in the US MC. The first bite is Art24(2)(a)(iii). The second bite is Art 24(2)(a). The third bite isArt 24(1)(b)(i). The Treasury Department Technical Explanation tothe US-France DTC provides a clear roadmap to the 3-bite rule soyou may want to read it.

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4.3 Ratings (701 Votes)

Articule 242aiii states beneficiary shall be entitled to a tax credit against the French tax Such credit shall be equal i in the case of income other than that referred to in subparagraphs ii and iii to the amount of French tax attributable to such income See Answer

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