Treasury Announces Entry into Force Dates for Two Additional Tax Treaty Protocols


On September 20, 2019, the Department of the Treasury announced the entry into force dates of protocols amending tax treaties with Luxembourg and Switzerland. These protocols were ratified by the Senate earlier this year. The protocols with Luxembourg and Switzerland, in addition to protocols with Japan and Spain (see our September 2019 tax alert), are the first updates to U.S. income tax treaties in nearly 10 years. 
The protocol to the 1996 tax treaty between Luxembourg and the United States incorporates the modern international standards for exchange of information between the two countries’ tax administrations. This protocol entered into force on September 9, 2019, upon the delivery of the diplomatic note by the United States.
The protocol to the 1996 tax treaty between Switzerland and the United States modernizes the rules governing the exchange of information and provides for mandatory binding arbitration to expedite dispute resolution between the tax authorities of each country. This protocol entered into force on September 20, 2019, upon the exchange of instruments of ratification in Bern.
For effective dates of specific provisions within each of the protocols, taxpayers should refer to the specific agreements.

BDO Insight 

These tax treaty protocols bring the existing tax treaties with Luxembourg and Switzerland into closer conformity with current U.S. tax treaty policy to allow for greater tax information exchange, which will enhance efforts to bolster tax compliance and combat tax evasion.  Please contact a BDO international tax specialist if you would like more information regarding the protocols discussed above.