In this article, we will look at the 66 countries with a double tax treaty with the USA. If you wish to skip our detailed analysis, go to 10 Countries with a Double Tax Treaty with the USA.
Role of Double Tax
We are living in an interconnected world and people migrate from one country to another for better living standards and job opportunities. One thing they can’t escape is taxes. Governments run on taxes worldwide and income taxes are the most important among all the taxes, generated by individuals or businesses within their domain. In the global landscape of multinationals and startups, individuals and businesses can suffer complexities, one of which is the potential for double taxation. To circumvent paying tax on the same income twice, countries often have double taxation treaties (DTTs). The DTTs mitigate double taxation for individuals and businesses operating across borders. The United States has a tax treaty with 66 countries. The double tax treaty between the US and Hungary has been terminated, effective January 1, 2024. The US-Chile tax treaty was approved by the US Senate on June 22, 2023, effective February 1, 2024.
Under the double taxation treaties, residents of foreign countries are taxed at reduced rates or are exempt from taxes on income generated from certain items they obtain from sources within the US. The reduced rates and exemptions under the double taxation treaties vary among countries and specific items of income. There is a “saving clause” in most income tax treaties, which inhibits a US citizen or resident from using tax treaty provisions to prevent taxation of the US source income.
Countries with the highest income tax rates in the world include Finland, Denmark, Japan, Austria, and Sweden, among others. Finland has a 56.95% personal income tax rate, and Denmark, Japan, Austria, and Sweden have personal income tax rates of 56%, 55.97%, 55%, and 52.30%, respectively. The country’s tax code structure plays a vital role in its economic performance. A well-organized tax code opens the gateway for taxpayers to apply tax policies and encourage economic development through their taxes. As we mentioned earlier, marginal tax rates on individual and corporate income have declined across the OECD nations over the past few decades. Estonia continues to be the country with the best tax code for a consecutive tenth year. While, Latvia, New Zealand, Switzerland, Czech Republic, Luxembourg, and Turkey are next that have the best tax code. The Philippines, Nicaragua, Panama, Costa Rica, and Belize, are some of the best tax free retirement countries for US citizens.
The US has been a prime location for immigrants for many years now, due to its greater job market and opportunities to become a multimillionaire. In 2024, several US states went through significant tax changes, including 16 states with income tax cuts on both individual and corporate incomes. Altogether, thirty-four US states went through notable tax changes in 2024. The Internal Revenue Service (IRS) has made changes to over 60 tax provisions for the tax year 2024, which will apply to income tax returns filed in 2025. For individual taxpayers and married couples with incomes greater than $609,350 and $731,200, respectively, the top tax remains unchanged at 37% for the tax year 2024. The IRS has upgraded the standard deduction to $14,600 for individual taxpayers and married individuals filing separately, up by $750 from 2023. For households, the standard deduction will be $21,900 in tax year 2024, rising by $1,100 from the tax amount charged in 2023.
Biggest Economies with a Double Tax Treaty with the USA
China, India, Japan, Germany, and Russia are the biggest economies with a double tax treaty with the USA. In today’s globalized world, businesses operate across different countries. Some of the top companies driving these economies include JD.Com Inc. (NASDAQ:JD), Infosys Limited (NYSE:INFY), and Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG).
JD.Com Inc. (NASDAQ:JD) has one of the largest in-house e-commerce customer service teams in China. On February 6, JD.Com Inc. (NASDAQ:JD) reported that it is raising the annual salary for over 20,000 front-line customer service employees of the company by an average of 30%. This follows JD.Com Inc.’s (NASDAQ:JD) recent salary adjustment in December 2023, where the company almost doubled the fixed salaries of procurement and sales staff within JD Retail for 2024.
Infosys Limited (NYSE:INFY) is India’s leading multinational IT firm. On February 13, Infosys Limited (NYSE:INFY) announced its strategic partnership with Pacific International Lines (PIL), a leading Singapore-based shipping company. PIL will utilize Infosys Limited’s (NYSE:INFY) services to accelerate its digital transformation initiative and enhance its shipping and logistics ecosystem. Global Head Retail, Consumer Goods & Logistics, Infosys Limited (NYSE:INFY), Karmesh Vaswani, said:
“With our strong domain expertise in multimodal logistics, we are committed to delivering innovative solutions that not only address our client’s current needs but also set the stage for embracing the latest industry trends. As a trusted advisor, we aim to transform PIL’s customer portals to become simple, intuitive, and more experiential, leveraging scalable technology through the AI-powered Infosys Topaz suite of offerings.”
Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is one of the leading firms based out of Japan. On February 14, Mitsubishi UFJ Financial Group, Inc.’s (NYSE:MUFG) subsidiary, MUFG Bank, Ltd., announced that it has signed an agreement with WealthNavi Inc. (TYO:7342) on capital and business alliance. Through the capital and business alliance, MUFG Bank will subscribe to 9.11 million common stock shares of WealthNavi Inc. (TYO:7342) via a third-party allotment. This will make WealthNavi Inc. (TYO:7342) an equity method affiliate of MUFG Bank.
These were a few leading companies based out of some of the biggest economies that have a double tax treaty with the USA. Now, let’s take a look at the countries with a double tax treaty with the USA.
Our Methodology
We have gathered data for the countries with a double tax treaty with the USA from KPMG, updated as of June 30, 2023. We have corroborated the list against the IRS List of Tax Treaties database. We have ranked countries with a double tax treaty with the USA based on their GDP (PPP), as of 2024. The list is ranked in ascending order of their GDP (PPP). The data for GDP (PPP) is taken from the International Monetary Fund (IMF) database.
We have also listed the treaty withholding rates on interest and the effective date of the double tax treaty with the USA of each country. The treaty withholding rates on interest explain the specific tax rate that a country has agreed to withhold at the source when paying interest to residents of another treaty partner country. This helps prevent double taxation, where the same income is taxed in both the source country and the residence country.
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66 Countries with a Double Tax Treaty with the USA
66. Barbados
GDP (PPP): $5.78 Billion
Treaty Withholding Rate on Interest: 5%
Effective Date: January 1, 1984
Barbados has a 5% treaty withholding rate on interest and the treaty’s effective date is January 1, 1984. Barbados is placed 66th among the countries with a double tax treaty with the USA.
65. Iceland
GDP (PPP): $28.17 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 2009
Iceland has a 0% treaty withholding rate on interest and the treaty’s effective date is effective January 1, 2009. Iceland is ranked among the countries with a double tax treaty with the USA.
64. Malta
GDP (PPP): $35.17 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2011
Malta has a 10% treaty withholding rate on interest and the treaty’s effective date is January 1, 2011. Malta has a GDP of $35.17 billion.
63. Jamaica
GDP (PPP): $37.16 Billion
Treaty Withholding Rate on Interest: 12.5%
Effective Date: January 1, 1982
Jamaica has a GDP of $37.16 billion and a 12.5% treaty withholding rate on interest.
62. Moldova
GDP (PPP): $45.02 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Moldova has a GDP of $45.02 billion and a 0% treaty withholding rate on interest. Moldova’s treaty with the USA became effective on January 1, 1976.
61. Trinidad & Tobago
GDP (PPP): $45.62 Billion
Treaty Withholding Rate on Interest: 30%
Effective Date: January 1, 1970
Trinidad & Tobago has a 30% treaty withholding rate on interest and the treaty’s effective date is effective January 1, 1970. Trinidad & Tobago has a GDP of $45.62 billion.
60. Kyrgyzstan
GDP (PPP): $47.58 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Kyrgyzstan has a GDP of $47.58 billion and a 0% treaty withholding rate on interest. Kyrgyzstan ranks 60th among the countries with a double tax treaty with the USA.
59. Cyprus
GDP (PPP): $52.14 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 1986
Cyprus has a GDP of $52.14 billion and a 10% treaty withholding rate on interest.
58. Tajikistan
GDP (PPP): $57.64 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Tajikistan has a GDP of $57.64 billion and a 0% treaty withholding rate on interest. Tajikistan’s double tax treaty became effective on January 1, 1976.
57. Armenia
GDP (PPP): $62.81 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Armenia has a GDP of $62.81 billion and a 0% treaty withholding rate on interest. Armenia’s treaty with the USA became effective on January 1, 1976.
56. Estonia
GDP (PPP): $63.86 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2000
Estonia has a GDP of $63.86 billion and a 10% treaty withholding rate on interest.
55. Sri Lanka
GDP (PPP): $74.40 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2004
Sri Lanka has a GDP of $74.40 billion and a 10% treaty withholding rate on interest.
54. Latvia
GDP (PPP): $80.33 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2000
Latvia has a GDP of $80.33 billion and has a 10% treaty withholding rate on interest. Latvia is placed 54th among the countries with a double tax treaty with the USA.
53. Georgia
GDP (PPP): $88.09 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Georgia has a 0% treaty withholding rate on interest and the treaty’s effective date is January 1, 1976. Georgia is one of the countries with a double tax treaty with the USA.
52. Luxembourg
GDP (PPP): $97.73 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 2001
Luxembourg has a GDP of $97.73 billion and a 0% treaty withholding rate on interest.
51. Slovenia
GDP (PPP): $113.60 Billion
Treaty Withholding Rate on Interest: 5%
Effective Date: January 1, 2002
Slovenia has a GDP of $113.60 billion and a 5% treaty withholding rate on interest.
50. Turkmenistan
GDP (PPP): $131.71 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Turkmenistan has a 0% treaty withholding rate on interest and the treaty’s effective date is January 1, 1976. Turkmenistan is placed 50th among the countries with a double tax treaty with the USA.
49. Lithuania
GDP (PPP): $144.26 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2000
Lithuania has a GDP of $144.26 billion and a 10% treaty withholding rate on interest.
48. Tunisia
GDP (PPP): $168.93 Billion
Treaty Withholding Rate on Interest: 15%
Effective Date: January 1, 1990
Tunisia has a 15% treaty withholding rate on interest and the treaty’s effective date is January 1, 1990. Tunisia has a GDP of $168.93 billion.
47. Azerbaijan
GDP (PPP): $201.48 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Azerbaijan has a GDP of $201.48 billion and a 0% treaty withholding rate on interest. Azerbaijan’s treaty with the USA became effective on January 1, 1976.
46. Venezuela
GDP (PPP): $226.48 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2000
Venezuela has a 10% treaty withholding rate on interest and the treaty’s effective date is January 1, 2000. Venezuela has a GDP of $226.48 billion.
45. Bulgaria
GDP (PPP): $228.40 Billion
Treaty Withholding Rate on Interest: 5%
Effective Date: January 1, 2009
Bulgaria has a GDP of $228.40 billion and a 5% treaty withholding rate on interest. Bulgaria’s treaty with the USA became effective on January 1, 2009.
44. Belarus
GDP (PPP): $229.20 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Belarus has a GDP of $229.20 billion and a 0% treaty withholding rate on interest. Belarus’ treaty with the USA became effective on January 1, 1976.
43. Slovak Republic
GDP (PPP): $240.65 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1993
The Slovak Republic has a GDP of $240.65 billion and a 0% treaty withholding rate on interest.
42. New Zealand
GDP (PPP): $288.48 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 1984
New Zealand has a 10% treaty withholding rate on interest and the treaty’s effective date is January 1, 1984. New Zealand has a GDP of $288.48 billion.
41. Finland
GDP (PPP): $346.97 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1991
Finland has a GDP of $346.97 billion and a 0% treaty withholding rate on interest.
40. Uzbekistan
GDP (PPP): $400.86 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1976
Uzbekistan has a 0% treaty withholding rate on interest and the treaty’s effective date is January 1, 1976. Uzbekistan is ranked 40th among the countries with a double tax treaty with the USA.
39. Morocco
GDP (PPP): $408.32 Billion
Treaty Withholding Rate on Interest: 15%
Effective Date: January 1, 1981
Morocco has a 15% treaty withholding rate on interest and the treaty’s effective date is January 1, 1981. Morocco has a GDP of $408.32 billion.
38. Greece
GDP (PPP): $434.83 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1953
Greece has the oldest double tax treaty with the USA which became effective on January 1, 1953. Greece has a 0% treaty withholding rate on interest and a GDP of $434.83 billion.
37. Denmark
GDP (PPP): $458.09 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 2001
Denmark has a GDP of $458.09 billion and a 0% treaty withholding rate on interest. Denmark’s double tax treaty with the USA became effective on January 1, 2001.
36. Norway
GDP (PPP): $470.17 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1971
Norway has a 0% treaty withholding rate on interest and the treaty’s effective date is January 1, 1971. Norway is placed 36th among the countries with a double tax treaty with the USA.
35. Portugal
GDP (PPP): $482.851 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 1996
Portugal has a 10% treaty withholding rate on interest and the treaty’s effective date is January 1, 1996. Portugal has a GDP of $482.851 billion.
34. Ukraine
GDP (PPP): $501.07 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 2001
Ukraine has a GDP of $501.07 billion and a 0% treaty withholding rate on interest.
33. Czech Republic
GDP (PPP): $564.19 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1993
The Czech Republic has a GDP of $564.19 billion and a 0% treaty withholding rate on interest.
32. Israel
GDP (PPP): $565.99 Billion
Treaty Withholding Rate on Interest: 17.5%
Effective Date: January 1, 1995
Israel has a 17.5% treaty withholding rate on interest and the treaty’s effective date is January 1, 1995. Israel is one of the countries with a double tax treaty with the USA.
31. Chile
GDP (PPP): $620.88 Billion
Treaty Withholding Rate on Interest: 15%
Effective Date: February 1, 2024
Chile has a 15% treaty withholding rate on interest and the treaty’s effective date is February 1, 2024. Chile is the latest country with a double tax treaty with the USA.
30. Austria
GDP (PPP): $645.56 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1999
Austria has a 0% treaty withholding rate on interest and the treaty’s effective date is January 1, 1999. Austria is placed 30th among the countries with a double tax treaty with the USA.
29. Kazakhstan
GDP (PPP): $696.90 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 1996
Kazakhstan has a 10% treaty withholding rate on interest and the treaty’s effective date is effective January 1, 1996. Kazakhstan has a GDP of $696.90 billion.
28. Sweden
GDP (PPP): $736.74 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1996
Sweden has a GDP of $736.74 billion and a 0% treaty withholding rate on interest.
27. Ireland
GDP (PPP): $764.07 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1998
Ireland has a GDP of $764.07 billion and a 0% treaty withholding rate on interest. Ireland’s treaty with the USA became effective on January 1, 1998.
26. Belgium
GDP (PPP): $793.82 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 2008
Belgium has a GDP of $793.82 billion and a 0% treaty withholding rate on interest. Belgium’s treaty with the USA became effective on January 1, 2008.
25. Switzerland
GDP (PPP): $820.70 Billion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1998
Switzerland has a GDP of $820.70 billion and the country’s double tax treaty with the USA became effective on January 1, 1998.
24. Romania
GDP (PPP): $828.75 Billion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 1974
Romania has a GDP of $828.75 billion and a 10% treaty withholding rate on interest. Romania’s treaty with the USA became effective on January 1, 1974.
23. South Africa
GDP (PPP): $1.04 Trillion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1998
South Africa’s double tax treaty with the USA became effective on January 1, 1998. South Africa has a 0% treaty withholding rate on interest and ranks 23rd among the countries with a double tax treaty with the USA.
22. Netherlands
GDP (PPP): $1.34 Trillion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1994
The Netherlands has a GDP of $1.34 trillion and a 0% treaty withholding rate on interest.
21. Philippines
GDP (PPP): $1.38 Trillion
Treaty Withholding Rate on Interest: 15%
Effective Date: January 1, 1983
The Philippines has a 15% treaty withholding rate on interest and the treaty’s effective date is January 1, 1983. The Philippines has a GDP of $1.38 trillion.
20. Bangladesh
GDP (PPP): $1.62 Trillion
Treaty Withholding Rate on Interest: 10%
Effective Date: January 1, 2007
Bangladesh has a 10% treaty withholding rate on interest and the treaty’s effective date is January 1, 2007. Bangladesh has a GDP of $1.62 trillion.
19. Pakistan
GDP (PPP): $1.64 Trillion
Treaty Withholding Rate on Interest: 30%
Effective Date: January 1, 1959
Pakistan has a 30% treaty withholding rate on interest and the treaty’s effective date is January 1, 1959. Pakistan ranks 19th among the countries with a double tax treaty with the USA.
18. Thailand
GDP (PPP): $1.66 Trillion
Treaty Withholding Rate on Interest: 15%
Effective Date: January 1, 1998
Thailand has a GDP of $1.66 trillion. Thailand’s treaty withholding rate on interest is 15%.
17. Australia
GDP (PPP): $1.78 Trillion
Treaty Withholding Rate on Interest: 10%
Effective Date: December 1, 1983
Australia has a GDP of $1.78 trillion. Australia’s treaty withholding rate on interest is 10%.
16. Poland
GDP (PPP): $1.79 Trillion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1974
Poland has a 0% treaty withholding rate on interest and the treaty’s effective date is January 1, 1974. Poland ranks 16th among the countries with a double tax treaty with the USA.
15. Egypt
GDP (PPP): $1.92 Trillion
Treaty Withholding Rate on Interest: 15%
Effective Date: January 1, 1982
Egypt has a GDP of $1.92 trillion and has a 15% treaty withholding rate on interest. Egypt ranks 15th among the countries with a double tax treaty with the USA.
14. Canada
GDP (PPP): $2.47 Trillion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1985
Canada has a GDP of $2.47 trillion and a 0% treaty withholding rate on interest.
13. Spain
GDP (PPP): $2.51 Trillion
Treaty Withholding Rate on Interest: 0%
Effective Date: January 1, 1991
Spain has a GDP of $2.51 trillion and a 0% treaty withholding rate on interest. Spain’s treaty with the USA became effective on January 1, 1991.
12. South Korea
GDP (PPP): $3.06 Trillion
Treaty Withholding Rate on Interest: 12%
Effective Date: January 1, 1980
South Korea has a GDP of $3.06 trillion and a 12% treaty withholding rate on interest.
11. Italy
GDP (PPP): $3.29 Trillion
Treaty Withholding Rate on Interest: 10%
Effective Date: February 1, 2010
Italy has a GDP of $3.29 trillion and a 10% treaty withholding rate on interest. Italy is placed 11th among the countries with a double tax treaty with the USA.
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Disclosure: none. 66 Countries with a Double Tax Treaty with the USA is originally published on Insider Monkey.