The Students and Trainee Article of the new treaty with Switzerland limits benefits to payments that arise outside the United States as does the old treaty. Unlike the old treaty, the new treaty does not include a 2-year exemption from tax for teachers. The new treaty is more favorable for independent contractors allowing exemption from tax on U.S. payments if the individual does not have a fixed base in the United States. The Other Income Article of the new treaty exempts prizes and awards paid to a resident of Switzerland from tax where the old treaty does not. The new treaty, unlike the old treaty, includes a residency tie-breaker rule.
Benefits are limited to five taxable years from date of arrival.
The treaty includes a Teacher and Researcher Article exempting remuneration paid for teaching or engaging in research for a period of two years. The Treasury Explanation of the treaty makes it clear that the benefit is lost retroactively if the 2-year period is exceeded. An individual who has claimed the benefits of the Student and Trainee Article must reestablish tax residency in Thailand before claiming benefits under the Teacher and Researcher Article. The Student and Trainee Article and teacher and Researcher Article have a combined limitation period of 5 years from date of arrival. The Other Income Article of the treaty does not exempt prizes and awards paid to a resident of Thailand from U.S. tax.