Treasury Announces Entry into Force Dates for Two Tax Treaty Protocols

September 2019

Summary

On August 30, 2019, the Department of the Treasury announced the entry into force dates of protocols amending tax treaties with Japan and Spain. These protocols, along with protocols amending tax treaties with Luxembourg and Switzerland, were ratified by the Senate earlier this year.  
 
The protocol to the 2003 tax treaty between Japan and the United States reduces withholding tax rates on interest and certain dividends. It also provides for mandatory binding arbitration to facilitate more effective and expedient resolutions of certain tax disputes between U.S. and Japanese tax administrations, resulting in certainty for taxpayers. This protocol entered into force on August 30, 2019, upon the exchange of instruments of ratification in Tokyo.
 
The protocol to the 1990 tax treaty between Spain and the United States reduces withholding tax rates on interest, royalties, certain direct dividends, and capital gains. It also provides for mandatory binding arbitration to streamline dispute resolutions between the two countries’ tax administrations. This protocol will enter into force on November 27, 2019.
 
For effective dates of specific provisions within each of the protocols, taxpayers should refer to the specific agreements.
 

BDO Insight

These tax treaty protocols are the first such updates to tax treaties in nearly 10 years and are intended to provide additional certainty for taxpayers conducting business in the United States and the treaty country partner. Please contact a BDO international tax specialist if you would like more information regarding the protocols discussed above.
 
 
CONTACT:
 
Joe Calianno
National Tax Office Partner and International Tax Technical
Practice Leader
  Monika Loving
Partner and International Tax Practice Leader
 

 
Brandon Boyle
Principal
  Reese Fredrickson
Partner

 
Annie Lee
Partner
  Chip Morgan
Partner

 
Robert Pedersen
Partner
  Jerry Seade
Principal

 
Natallia Shapel
Partner
  Sean Dokko
National Tax Office Managing Director