Announcement 2014-24 - Reciprocal tax exemption MOU with Kuwait on income from international operations of aircraft  

May 30:  In Announcement 2014-24—which appears in the Internal Revenue Bulletin dated Monday, June 2, 2014—the IRS provides text of a “memorandum of understanding” (MOU) between the United States and Kuwait for a reciprocal tax exemption for income derived from the international operation of aircraft.

This reciprocal tax exemption under the MOU is based on equivalent exemptions by each country, and applies for gross income derived from the international operation of aircraft for tax years beginning on or after January 1, 2015.


Read text of Announcement 2014-24, which appears on page 21 of the 35-page Monday’s edition of the Internal Revenue Bulletin, IRB 2014-23 [PDF 1.23 MB].

Summary

According to the MOU, the United States will grant an exemption from federal income tax for the gross income derived from the international operation of aircraft by individuals who are residents of Kuwait (other than U.S. citizens or residents), and by corporations organized in Kuwait that are engaged in the international operation of aircraft. In the case of a Kuwaiti corporation, the United States will grant an exemption only if the corporation meets the ownership or public trading requirements of U.S. law.


The government of Kuwait will grant an exemption from taxes imposed by Kuwait for the gross income derived from international operation of aircraft by individuals who are residents of the United States (other than Kuwaiti citizens or residents), and by corporations that are organized in the United States that are engaged in the international operation of aircraft.




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