Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 65-4

1965-1 C.B. 630

Full Text

Rev. Rul. 65-4

Article X of the United States-Sweden Income Tax Convention, T.D. 4975, C.B. 1940-2, 43, provides, in part, that wages, salaries and similar compensation and pensions paid by one of the contracting States or by the political subdivisions or territories or possessions thereof to individuals residing in the other State shall be exempt from taxation in the latter State.

In an exchange of correspondence with the Secretary of the Treasury and the Swedish Minister of Finance, it was agreed that benefit payments (other than lump-sum payments) made to individuals under the Social Security Act, 42 U.S.C. 402, and the Railroad Retirement Act of 1937, 45 U.S.C. 228c, constitute pensions paid by the United States Government within the purview of Article X of the tax convention between the United States and Sweden, and that such payments made to individuals residing in Sweden are exempt from taxation by Sweden.

Accordingly, similar benefits paid under Swedish law to individuals residing in the United States are exempt from taxation by the United States.