Newer treaties allow the treaty benefit one time only. Some older treaties allow multiple benefits if the individual reestablishes his or her tax residency and physical presence in the treaty country for a substantial period, typically one year, before claiming benefits again. The character of the entity for which teaching or research is performed. Whether or not the individual qualified for treaty benefits previously. In the case of researchers, whether or not the research is for public or private benefit.
Many treaties contain additional limitations on exemptions from tax for artists and athletes.
Typically, exemption is limited to a fixed dollar amount in addition to the limitations imposed by the Income from Employment and Income from Self-employment articles. J. Permanent Establishment Tax treaties determine the threshold of activities allowed by employees and agents of foreign corporations and businesses before the profits from the business activities will be subject to U.S. income taxes. Absent a tax treaty, a nonresident alien or foreign corporation is taxed on income effectively connected to a U.S. trade or business at graduated rates. In addition, a 30 percent branch tax is imposed on the profits of the enterprise to the extent that they are not reinvested in the United States. Since treaty benefits and limitations vary by treaty, the applicable tax treaty must be reviewed considering all the facts and circumstances to determine eligibility for treaty benefits.