Tax Treaty Case Law around the Globe 2013

S. 339 USA: The United Airlines Flight Attendants’ Saga Continues

Yariv Brauner

1. S. 341 Introduction

Two years ago, in this conference, in Vienna, Jacques Sasseville presented the Savary case. Ms. Savary was a United States citizen and a resident of France, who worked as a flight attendant on cross-Atlantic flights for United Airlines. In that case – due to unfortunate management of the case itself, a straightforward error by the tax court, and perhaps less than adequate treatment by the revenue authorities involved – Ms. Savary found herself subject to double taxation on her wages. Surprisingly, very similar cases were decided again in 2012 based on very similar facts and circumstances. Even more surprisingly, it seems that in these cases neither the parties, nor the United States Tax Court found it necessary to reference the Savary case or its discussion in this conference and the proceedings’ book.

The fundamental issue that these cases raise is the compatibility of the unique United States’ worldwide taxation of its citizens with the international tax regime pursuant to which custom almost all countries tax on a worldwide basis only their residents (regardless of citizenship). This United ...