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December 16, 08
NEWS / Treasury Welcomes Entry Into Force of New Tax Treaties, ProtocolThe Treasury Department announced today that a tax treaty protocol and two new tax treaties have entered into force. New tax treaties (and accompanying protocols) with Bulgaria and Iceland and a protocol amending the existing tax treaty with Canada entered into force December 15, 2008. All are generally effective for tax years beginning on or after January 1, 2009. Certain provisions of the treaties and protocols, however, have different effective dates. Provisions of the protocol with Canada, which amends the existing treaty (signed in 1980 and previously amended), include: * Phased-in elimination of source-country withholding taxes on interest; and * Mandatory binding arbitration of certain cases that cannot be resolved by the competent authorities within a specific period. Provisions of the new treaty and protocol with Iceland, which replace the existing treaty (signed in 1975), include: * Reductions of source-country withholding taxes on certain dividends; and * Modern limitation on benefits provisions. Provisions of the new treaty and protocols with Bulgaria include: * Reductions of source-country withholding taxes on dividends, interest, and royalties; * Elimination of source-country withholding taxes on interest paid to financial institutions and on interest and dividends paid to pension funds; and * Modern limitation of benefits provisions. The treaty and first protocol with Bulgaria was signed in Washington on February 23, 2007, and the second protocol with Bulgaria was signed in Sofia on February 26, 2008; the protocol with Canada was signed in Chelsea on September 21, 2007; and the treaty and protocol with Iceland was signed in Washington on October 23, 2007. The Senate approved the new treaties and protocols on September 23, 2008. http://www.treas.gov/press/releases/hp1327.htm Tags: tax treaties, tax treaty, |
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