[Senate Treaty Document 111-8]
[From the U.S. Government Publishing Office]
111th Congress Treaty Doc.
SENATE
2d Session 111-8
_______________________________________________________________________
PROTOCOL AMENDING TAX CONVENTION WITH LUXEMBOURG
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
transmitting
PROTOCOL AMENDING THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED
STATES OF AMERICA AND THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG
FOR
THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION
OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
AND CAPITAL, SIGNED ON MAY 20, 2009, AT LUXEMBOURG
(THE ``PROPOSED PROTOCOL'') AND A RELATED AGREEMENT EFFECTED BY THE
EXCHANGE OF NOTES ALSO SIGNED ON
MAY 20, 2009
November 15, 2010.--Treaty was read the first time, and together with
the accompanying papers, referred to the Committee on Foreign Relations
and ordered to be printed for the use of the Senate
LETTER OF TRANSMITTAL
----------
The White House,
November 15, 2010.
To the Senate of the United States:
I transmit herewith, for the advice and consent of the
Senate to its ratification, the Protocol Amending the
Convention between the Government of the United States of
America and the Government of the Grand Duchy of Luxembourg for
the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income and Capital, signed on
May 20, 2009, at Luxembourg (the ``proposed Protocol'') and a
related agreement effected by the exchange of notes also signed
on May 20, 2009. I also transmit for the information of the
Senate the report of the Department of State, which includes an
Overview of the proposed Protocol and related agreement.
The proposed Protocol and related agreement provide for
more robust exchange of information between tax authorities in
the two countries to facilitate the administration of each
country's tax laws. They generally follow the current U.S.
Model Income Tax Convention and the Organization for Economic
Cooperation and Development standards for exchange of tax
information.
I recommend that the Senate give early and favorable
consideration to the proposed Protocol and related agreement
and give its advice and consent to their ratification.
Barack Obama.
LETTER OF SUBMITTAL
----------
Department of State,
Washington, August 3, 2010.
The President,
The White House.
The President: I have the honor to submit to you, with a
view to their transmission to the Senate for advice and consent
to ratification, the Protocol Amending the Convention between
the Government of the United States of America and the
Government of the Grand Duchy of Luxembourg for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income and Capital, signed on May 20, 2009,
at Luxembourg (the ``proposed Protocol'') together with a
related agreement effected by exchange of notes also signed on
May 20, 2009. The proposed Protocol and related agreement were
negotiated to bring the existing income tax Convention with
Luxembourg (the ``existing Convention'') into closer conformity
with current U.S. tax treaty policy regarding the exchange of
tax information; and in recognition of the importance of the
United States' economic relations with Luxembourg. I recommend
that the proposed Protocol be transmitted to the Senate for its
advice and consent to ratification.
The proposed Protocol and related agreement provide for
more robust exchange of information between tax authorities in
the two countries to facilitate the administration of each
country's tax laws. They generally follow the current U.S.
Model Income Tax Convention and the Organization for Economic
Cooperation and Development standards for exchange of
information. An overview of key provisions of the proposed
Protocol is enclosed with this report.
The proposed Protocol is self-executing. The Department of
the Treasury and the Department of State cooperated in the
negotiation of the proposed Protocol and related agreement, and
the Department of the Treasury joins the Department of State in
recommending that the proposed Protocol and related agreement
be transmitted to the Senate as soon as possible for its advice
and consent to ratification.
Respectfully submitted.
Hillary Rodham Clinton.
Enclosures: As stated.
OVERVIEW
The proposed Protocol to amend the income tax Convention
with Luxembourg (proposed Protocol) and the related agreement
effected by exchange of notes were negotiated to bring the
existing Convention, signed in 1996 (existing Convention), into
closer conformity with current U.S. tax treaty policy regarding
exchange of information. There are, as with all bilateral tax
conventions, some minor variations from the language of the
U.S. Model Income Tax Convention. In the proposed Protocol and
related agreement, these minor differences reflect particular
aspects of Luxembourg law and treaty policy. However, the
proposed Protocol and related agreement generally follow the
current U.S. Model Income Tax Convention and the Organization
for Economic Cooperation and Development standards for exchange
of tax information.
Exchange of information
The proposed Protocol replaces the existing Convention's
tax information exchange provisions with updated rules that are
consistent with current U.S. tax treaty practice. The proposed
Protocol allows the tax authorities of each country to exchange
information relevant to carrying out the provisions of the
agreement or the domestic tax laws of either country. Among
other things, the proposed Protocol would allow the United
States to obtain information from Luxembourg whether or not
Luxembourg needs the information for its own tax purposes, and
provides that requests for information cannot be declined
solely because the information is held by a bank or other
financial institution. The proposed related agreement effected
by exchange of notes sets forth agreed understandings between
the parties regarding the updated provisions on tax information
exchange, including that:
the United States and Luxembourg will ensure that
their respective competent authorities have the authority to
obtain and provide upon request information held by banks and
other financial institutions and information regarding
ownership of certain entities; and
information shall be exchanged without regard to
whether the conduct being investigated would be a crime under
the laws of the requested State.
Entry into force
The proposed Protocol would enter into force once both the
United States and Luxembourg have notified each other that
their respective applicable procedures for ratification have
been satisfied. It would have effect with respect to requests
made on or after the date of entry into force with regard to
tax years beginning on or after January 1, 2009. The related
agreement effected by exchange of notes would enter into force
on the date of entry into force of the proposed Protocol and
would become an integral part of the Convention on that date.