- 10 -
and last because relief to German taxpayers is of no import to
this controversy.
According to article 23(1), tax under the U.S.-Germany
treaty "shall be determined * * * in accordance with the
provisions and subject to the limitations of the law of the
United States". This section further provides that the United
States will allow as a credit against U.S. tax, taxes paid or
accrued to Germany by U.S. citizens or residents, subject to the
limitations of U.S. law. Under this general rule, there is
harmony between the U.S.-Germany treaty and section 59 because
section 59 had been enacted 5 years before the U.S.-Germany
treaty became effective and, therefore, was one of the existing
laws recognized as a limitation on the U.S.-Germany treaty in
article 23(1).
The interaction of section 59 and the U.S.-Germany treaty
provision was specifically recognized in the technical
explanation to the U.S. Model Income Tax Treaty double taxation
provision, after which the U.S.-Germany treaty provision is
patterned. The commentary states that "When the alternative
minimum tax is due, the alternative minimum tax foreign credit
generally is limited in accordance with U.S. law to 90 percent of
alternative minimum tax liability." Rhodes & Langer, 6 U.S.
International Taxation and Tax Treaties, U.S. Model Income Tax
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011