[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.




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