Dependent Personal Services Tax Treaty

A dependent personal services tax treaty refers to provisions in international tax agreements that govern the taxation of income earned by employees—those providing services under an employer’s direction—across borders. These treaty rules typically determine which country has the right to tax employment income when an individual works in one country but resides in another or is temporarily present abroad. Most treaties follow guidelines similar to those in the OECD Model Tax Convention, which generally allow the country of residence to tax the income unless the employment is exercised in another country; however, the host country may only tax the income if the employee is present for more than 183 days, or if the employer is a resident of the host country or maintains a permanent establishment there. These rules are designed to prevent double taxation and provide clarity for international workers and employers.