That's an incomplete answer. For example, under the US-Thai DTA, Thailand has "primary/exclusive taxation rights" on private pensions -- but under the "saving clause" of the DTA, the US has secondary taxation rights and thus can also tax this income, but must absorb a tax credit for the taxes paid to Thailand. Thus the "saving clause" effectively eliminates the "exclusive" taxation right of Thailand. And, because of the "saving clause," which says the US has taxation rights regardless of what the DTA says -- the US always at least has secondary taxation rights in situations where it doesn't have "primary/exclusive" taxation rights. The example above, re private pensions, is such a case. So to say Thailand has to absorb a tax credit, when the DTA says they have "primary/exclusive" taxation rights -- is false. Another situation under the DTA, where both countries have taxation rights, is rental income. Here, for property held in the US, a Yank living in Thailand, but receiving rental remittances from his property in the US -- has a primary taxation requirement to the US. But Thailand has secondary taxation rights. So in this situation, you'd declare your rental remittance income to Thailand -- but would take a tax credit against this with those taxes paid to the US. So, rule of thumb when both countries can tax -- primary country keeps all the taxes; secondary country has to absorb a tax credit. Now, if Thailand wants to absorb a tax credit for US taxes paid on private pensions -- that's their prerogative. But why they would want to do this -- is beyond me.
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