Under most U.S. treaties, a resident of the other country must have a permanent establishment in the United States before being subject to U.S. taxation on business profits earned within the United States.

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This statement is true. Many U.S. tax treaties include a "permanent establishment" provision, which means that a resident of the treaty country must have a fixed place of business in the United States to be subject to U.S. taxation on business profits earned within the country. Without a permanent establishment, the profits would generally be taxed only in the other country where the resident is a resident or where the business is located.

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