Senate Ratifies Several Stalled Tax Treaty Protocols


Recently, the United States Senate approved the ratification of stalled protocols amending tax treaties with Luxembourg, Switzerland, Japan and Spain. New income tax treaties with Hungary, Chile and Poland, however, have still not been approved, partially due to concerns regarding the interaction of these treaties with Section 59A, Tax on base erosion payments of taxpayers with substantial gross receipts.
The protocols to amend the treaties were signed several years ago, but the ratification of the four protocols was stalled due to objections by Senator Rand Paul regarding taxpayer privacy concerns.
The protocols will enter into force once certain additional steps are taken by the United States and the treaty partner country.

BDO Insight

Taxpayers should review how the changes made by the protocols could potentially impact their business operations. Please contact a BDO International Tax Specialist if you would like more information regarding the protocols discussed above.