For U.S. citizens and green-card holders in Syria, U.S. tax compliance operates without the simplifications of a tax treaty or a social security agreement. Double taxation on earned income is managed through domestic U.S. law, and in practice that means the Foreign Earned Income Exclusion (FEIE).
A critical point for tax year 2025 is that the FTC is not available for Syrian taxes. IRS Publication 514 lists Syria as a sanctioned country for 2025 under Internal Revenue Code Section 901(j), so income taxes paid or accrued to Syria do not qualify for the credit. The OFAC sanctions relief in mid-2025 does not by itself change that; the Section 901(j) sanction period ends only when the underlying designation ends or the President grants a waiver.
US filing basics every American abroad must know
US citizens and green-card holders are taxed on worldwide income wherever they live, and usually must file Form 1040 once gross income exceeds the IRS threshold ($15,750 for single filers, $31,500 for married filing jointly, and $23,625 for head of household for 2025), even when no tax is ultimately due. The tools that reduce double taxation are the Foreign Earned Income Exclusion (FEIE, up to $130,000 for 2025 under IRC §911) and the Foreign Tax Credit. Neither is automatic. The FEIE requires a tax home in a foreign country plus either the bona fide residence test or 330 full days abroad in a 12-month period, and it reaches earned income only. The Foreign Tax Credit is figured separately for each income category under IRC §904 and is capped at the US tax on the foreign income in that category, so it reduces double taxation without guaranteeing that none remains.
Two reporting rules catch most filers in Syria: the FBAR (FinCEN Form 114), required when foreign financial accounts exceed $10,000 in aggregate at any point in the year, and Form 8938 (FATCA) for specified foreign assets above the applicable threshold. Both can carry penalties even when no tax is owed. If you are behind, the Streamlined Filing Compliance Procedures are the usual path back for non-willful taxpayers. They run on two tracks: the foreign track carries no offshore penalty but requires meeting the program's non-residency test, and the domestic track carries a 5% offshore penalty but works through amended returns, so it does not fit someone who never filed at all. Tax and interest on the catch-up years are owed whichever route applies.
US tax treaty with Syria
There is no comprehensive income tax treaty between the United States and Syria. Consequently, U.S. citizens cannot use treaty provisions to reduce withholding rates, determine tax residency, or exempt specific types of income from U.S. tax.
All mechanisms for preventing double taxation rely on U.S. domestic tax law. The main tool is the Foreign Earned Income Exclusion (FEIE), which excludes wages or self-employment income from U.S. income tax. The Foreign Tax Credit is not available for Syrian income taxes: IRS Publication 514 lists Syria as a sanctioned country for 2025 under Section 901(j), income from Syria falls in its own separate Form 1116 category, and an itemized deduction for the foreign tax is the remaining option.
Syrian Social Security and U.S. Tax
Syria's social security system is administered by the General Establishment for Social Insurance (GESI) for private-sector workers. Participation is mandatory.
- Employee contributions: 7% of earnings.
- Employer contributions: 14.1% of earnings.
- Self-employed contributions: 21.1% of declared earnings.
For U.S. tax purposes, contributions made by a U.S. citizen to the GESI system are generally not deductible on a U.S. tax return. The U.S. tax treatment of the plan itself is unverified, but government-mandated social security plans are typically not considered foreign trusts and do not trigger reporting on Form 3520. An interest in such a plan is also generally not reportable on the FBAR (FinCEN Form 114) or Form 8938.
Distributions from the GESI system are typically fully taxable by the United States. Without a tax treaty to specify otherwise, these payments are treated as foreign pension income on a U.S. tax return, and any Syrian tax paid on the distributions does not qualify for the Foreign Tax Credit while Syria remains a sanctioned country under Section 901(j).
Investments, property, and capital gains in Syria
The most significant issue for investors is that the Foreign Tax Credit (FTC) is not available for Syrian income taxes. In 2025, the U.S. Treasury's Office of Foreign Assets Control (OFAC) lifted the comprehensive sanctions regime against Syria, but that relief does not by itself lift the tax rule. IRS Publication 514 lists Syria as a sanctioned country for 2025 under IRC Section 901(j), so income taxes paid or accrued to Syria do not qualify for the credit. Income from Syria is a separate Form 1116 category, and an itemized deduction for the foreign tax is the remaining option.
For U.S. persons owning a Syrian business, such as a Limited Liability Company (LLC) or a Joint Stock Company (JSC), the entity is a Controlled Foreign Corporation (CFC) when U.S. shareholders in aggregate own more than 50% of it by vote or value, counting only those U.S. shareholders who each own 10% or more. That requires each such U.S. shareholder to file Form 5471 annually. Furthermore, the owner may have a current U.S. tax liability on the company's profits under the GILTI (Global Intangible Low-Taxed Income) rules, even if no distributions are made.
While the Damascus Securities Exchange (DSE) does not feature many retail investment funds, any investment in a non-U.S. pooled investment vehicle (like a mutual fund or ETF) should be presumed to be a Passive Foreign Investment Company (PFIC). This triggers complex reporting on Form 8621 and can result in punitive U.S. tax treatment unless specific and timely elections are made.
Whatever Syria charges locally, U.S. citizens remain subject to U.S. tax on their worldwide capital gains at the applicable U.S. rates, and while Syria stays on the Section 901(j) list there is no credit for Syrian tax to set against that.
Self-employment and companies in Syria
A critical point for self-employed U.S. citizens in Syria is that there is no U.S.-Syria totalization agreement. This has a major financial consequence: you are required to pay U.S. self-employment tax on your net earnings from self-employment, in addition to any mandatory social security contributions in Syria.
The U.S. self-employment tax is 15.3%, and it applies to 92.35% of your net earnings from self-employment, not to the full figure. It is composed of 12.4% for Social Security and 2.9% for Medicare. The 12.4% Social Security portion stops at the annual wage base ($176,100 for 2025), while the 2.9% Medicare portion applies to all of that base with no cap, plus a further 0.9% Additional Medicare Tax on combined Medicare-taxed wages and self-employment income above $200,000 for a single, head-of-household or qualifying-surviving-spouse filer, $250,000 for a joint return, and $125,000 for married filing separately. The tax is due once net earnings from self-employment are $400 or more. The Foreign Earned Income Exclusion (FEIE) cannot be used to reduce your income for self-employment tax purposes. You cannot obtain a Certificate of Coverage to claim an exemption from U.S. self-employment tax, meaning you will likely be subject to social security taxes in both countries simultaneously.
Worked examples
Salaried employee at an NGO in Damascus (2025)
Anna is a U.S. citizen working for an international NGO in Damascus, earning a salary of $95,000. She meets the requirements for the Foreign Earned Income Exclusion (FEIE). For 2025, the maximum FEIE is $130,000. Anna can file Form 2555 to exclude her entire $95,000 salary from U.S. income tax, resulting in a zero U.S. income tax liability on her earnings.
She will still need to file a U.S. tax return to claim the exclusion. She must also file an FBAR (FinCEN Form 114) if the aggregate value of her foreign financial accounts exceeds $10,000 at any point during the year. Any Syrian income tax she paid cannot be claimed as a Foreign Tax Credit, because Publication 514 lists Syria as a sanctioned country under Section 901(j) for 2025, so the FEIE is not merely the better option here, it is the one that works.
Self-employed IT consultant (2025)
Ben is a U.S. citizen living in Aleppo and working as a freelance IT consultant. His net self-employment income for 2025 is $80,000. Because there is no U.S.-Syria totalization agreement, Ben is liable for U.S. self-employment tax.
For U.S. income tax, Ben can use the FEIE to exclude the $80,000, resulting in no U.S. income tax. However, the FEIE does not affect self-employment tax. His U.S. self-employment tax is calculated as follows:
- Net earnings: $80,000
- Base for SE tax: $80,000 * 0.9235 = $73,880
- SE tax due: $73,880 * 0.153 = $11,303.64
Ben must file a U.S. tax return, including Schedule C and Schedule SE, and pay $11,303.64 in U.S. self-employment tax. This is in addition to the 21.1% he may be required to contribute to Syria's GESI social security system on his declared earnings.
Business owner of a Syrian LLC (2025)
Carlos, a U.S. citizen, is the sole owner of a Syrian Limited Liability Company (LLC) that provides logistics services. In 2025, the LLC earns a profit of $150,000 and does not pay Carlos a salary or dividend.
Because Carlos is a U.S. shareholder owning 10% or more, and U.S. shareholders in aggregate own more than 50% of the company by vote or value, which here is his single 100% stake, it is a Controlled Foreign Corporation (CFC). He must file Form 5471, an extensive information return about the foreign corporation, with his U.S. tax return. Even though he took no money out of the company, the company's profit may be considered GILTI (Global Intangible Low-Taxed Income). A portion of this $150,000 profit will likely be included as income on Carlos's personal U.S. tax return (Form 1040) and taxed at his individual rates. This demonstrates that owning a foreign company can create a U.S. tax liability even without receiving any direct payments.
Common mistakes for Americans in Syria
- Assuming a U.S.-Syria tax treaty exists to reduce or eliminate U.S. tax.
- Believing that the Foreign Earned Income Exclusion (FEIE) eliminates U.S. self-employment tax liability.
- Failing to pay U.S. self-employment tax, incorrectly assuming that paying into the Syrian social security system provides an exemption.
- Claiming the Foreign Tax Credit for Syrian income taxes; Publication 514 lists Syria as a sanctioned country under IRC Section 901(j) for 2025, so the credit is denied and an itemized deduction is the remaining option.
- Not filing Form 5471 for a controlled Syrian company, which can lead to significant penalties.
- Ignoring potential GILTI income from a profitable Syrian corporation, even when no dividends are paid out.
- Thinking that because no retail investment funds are widely available, the PFIC rules (Form 8621) are irrelevant, when they apply to any non-U.S. pooled fund.
- Believing that earning below the FEIE threshold means there is no requirement to file a U.S. tax return.
Syria tax FAQ
Is there a U.S.-Syria tax treaty?
No. There is no income tax treaty between the United States and Syria. U.S. citizens must rely on domestic U.S. tax provisions, such as the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC), to mitigate double taxation.
As a self-employed American in Syria, do I have to pay U.S. Social Security and Medicare taxes?
Yes. Because there is no totalization agreement between the U.S. and Syria, you are required to pay U.S. self-employment tax: 15.3% on 92.35% of your net earnings, with the 12.4% Social Security portion stopping at the annual wage base ($176,100 for 2025) and the 2.9% Medicare portion uncapped. You cannot get a Certificate of Coverage to avoid this, and you may be required to pay into both the U.S. and Syrian social security systems.
Can I claim a Foreign Tax Credit for income taxes I pay to Syria?
No, not for the 2025 tax year. IRS Publication 514 lists Syria as a sanctioned country under IRC Section 901(j), which denies a credit for income taxes paid or accrued to it. OFAC lifted its sanctions program in 2025, but the Section 901(j) sanction period ends only when the underlying designation ends or the President grants a waiver, and Publication 514 still lists Syria for 2025. You can generally take an itemized deduction for the foreign tax instead.
I own a small business in Syria. What are my U.S. reporting obligations?
A Syrian company like an LLC or JSC is a Controlled Foreign Corporation (CFC) when U.S. shareholders in aggregate own more than 50% of it by vote or value, counting only those U.S. shareholders who each own 10% or more. This requires you to file Form 5471 annually. You may also have to recognize and pay U.S. tax on the company's earnings under the GILTI rules, even if you don't take a distribution.
Is my Syrian social security pension taxable in the U.S.?
Yes, most likely. Without a tax treaty provision to exempt it, distributions from Syria's GESI social security system are generally considered taxable income by the IRS and must be reported on your U.S. tax return.
Do I need to report my interest in the Syrian GESI on my FBAR or Form 8938?
Generally, no. An interest in a foreign government-mandated social security system like GESI is typically not considered a reportable financial account for FBAR (FinCEN Form 114) or Form 8938 purposes.
What is a PFIC and should I be concerned about it in Syria?
A PFIC is a Passive Foreign Investment Company, which includes most non-U.S. mutual funds or pooled investments. While Syria may not have a developed market for such funds, the rule applies to any investment that fits the definition. If you invest in any non-U.S. fund, you should assume it is a PFIC and that you must file Form 8621, unless you can prove otherwise.
If my income is fully excluded by the FEIE, do I still need to file a U.S. tax return?
Yes, in most cases. You must file a return to claim the FEIE. Furthermore, the filing threshold for taxpayers abroad is very low. If you have net self-employment earnings of $400 or more, you must file to report and pay self-employment tax, even if your income tax is zero.
Sources and last reviewed
- U.S. Department of the Treasury (OFAC) (verified 2026-06-07)
- IRS, Publication 514, Foreign Tax Credit for Individuals (sanctioned countries, Section 901(j)) (verified 2026-08-12)
- SSA, Social Security Programs Throughout the World: Asia and the Pacific (Syria) (verified 2026-08-12)
- U.S. Social Security Administration, International Agreements (verified 2026-06-07)
- IRS, International Taxpayers (verified 2026-06-07)
Reviewed by Ilya Fayerman, Esq. (NY Bar) on
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