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Tax Treaties Will Get Senate Committee Review

June 19, 2019, 1:24 AM

The Senate Foreign Relations Committee will consider four protocols updating existing tax treaties on June 25, moving the U.S. closer to ratifying a tax treaty for the first time in nine years.

The committee meeting marks an important step forward after nearly a decade of inaction. There are currently seven treaties are pending before the Senate, where they have been held up for years by Sen. Rand Paul (R-Ky.). He has cited concerns that they compromise U.S. citizens’ private information.

Three of the pending treaties—with Chile, Hungary, and Poland—are new, and four—with Japan, Luxembourg, Spain, and Switzerland—are protocols to update existing treaties. A committee aide confirmed the date of the meeting, as well as the protocols that would be considered.

The objective is to get the treaties out of committee in the next week or so, said committee chairman Jim Risch (R-Idaho).

“We’re moving them as rapidly as we can,” Risch said. “When the cake is ready, we’re going to bake it.”

The treaties have already been the subject of a spat between Sen. Bob Menendez (D-N.J.), ranking member of the Foreign Relations Committee, and the Treasury Department. The senator said the agency went around him when it added reservations to ensure that three of the treaties didn’t override the anti-abuse provisions in the 2017 tax overhaul.

After the hearing, the treaties could move to a vote if Senate Majority Leader Mitch McConnell (R-Ky.) chooses to devote floor time to the issue.

To contact the reporters on this story: Isabel Gottlieb in Washington at igottlieb@bloombergtax.com; Kaustuv Basu in Washington at kbasu@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Jeff Harrington at jharrington@bloombergtax.com