Saving Clause (US Tax Treaties)

A provision in nearly every US bilateral income-tax treaty that 'saves' the United States's right to tax its citizens (and certain residents) on worldwide income as if the treaty did not exist, despite the treaty's other articles that would otherwise reduce taxation. The result: most US tax-treaty benefits are unavailable to US citizens — including the otherwise-applicable lower withholding rates, the allocation rules for cross-border employment income, and many tie-breaker provisions. Specific exceptions are typically carved out for items like teachers, researchers, government salaries, and certain student / trainee provisions. The saving clause is a major reason why US citizenship-based taxation creates persistent compliance complexity for Americans abroad even where a treaty exists.