Protocol Amending the Convention between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income, signed at Washington on October 2, 1996, signed on September 23, 2009, at Washington, as corrected by an exchange of notes effected November 16, 2010 and a related agreement effected by an exchange of notes on September 23, 2009 PDF

U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON
:
1
99–112
SENATE
" !
112THCONGRESS
1st Session
TREATYDOC.
2011
112–1
PROTOCOL AMENDING TAX CONVENTION WITH
SWISS CONFEDERATION
MESSAGE
FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
PROTOCOL AMENDING THE CONVENTION BETWEEN THE UNITED
STATES OF AMERICA AND THE SWISS CONFEDERATION FOR
THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO
TAXES ON INCOME, SIGNED AT WASHINGTON ON OCTOBER 2,
1996
JANUARY26, 2011.—Treaty was read the first time, and together with
the accompanying papers, referred to the Committee on Foreign Rela-
tions and ordered to be printed for the use of the Senate
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(III)
LETTER OF TRANSMITTAL
THEWHITEHOUSE, January 26, 2011.
To the Senate of the United States:
I transmit herewith, for the advice and consent of the Senate to
their ratification, the Protocol Amending the Convention between
the United States of America and the Swiss Confederation for the
Avoidance of Double Taxation with Respect to Taxes on Income,
signed at Washington on October 2, 1996, signed on September 23,
2009, at Washington, as corrected by an exchange of notes effected
November 16, 2010 (the ‘‘proposed Protocol’’) and a related agree-
ment effected by an exchange of notes on September 23, 2009 (the
‘‘related Agreement’’). 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 Tex Conven-
tion and the Organization for Economic Cooperation and Develop-
ment standards for exchange of tax information. The proposed Pro-
tocol and related Agreement also provide for mandatory arbitration
of certain cases that the competent authorities of each country
have been unable to resolve after a reasonable period of time.
I recommend that the Senate give early and favorable consider-
ation to the proposed Protocol and related Agreement and give its
advice and consent to their ratification.
BARACKOBAMA.
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(V)
LETTER OF SUBMITTAL
DEPARTMENT OFSTATE,
Washington, December 8, 2010.
The PRESIDENT,
The White House.
THEPRESIDENT: I have the honor to submit to you, with a view
to their transmission to the Senate for advice and consent to ratifi-
cation, the Protocol Amending the Convention between the United
States of America and the Swiss Confederation for the Avoidance
of Double Taxation with Respect to Taxes on Income, Signed at
Washington on October 2, 1996, signed on September 23, 2009, at
Washington, as corrected by an exchange of notes effected Novem-
ber 16, 2010 (‘‘proposed Protocol’’), together with a related agree-
ment effected by an exchange of notes on the same day (‘‘related
Agreement’’). The proposed Protocol and related Agreement were
negotiated to bring the existing income tax Convention with Swit-
zerland into closer conformity with current U.S. tax treaty policy,
and in recognition of the importance of the United States’ economic
relations with Switzerland. I recommend that the proposed Protocol
and related Agreement 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 Conven-
tion and the current Organization for Economic Cooperation and
Development standards for exchange of information. The proposed
Protocol and related Agreement also provide for mandatory arbitra-
tion of certain cases that the competent authorities of each country
have been unable to resolve after a reasonable period of time. An
overview of key provisions of the proposed Protocol and related
Agreement is enclosed with this report.
The proposed Protocol is self-executing. The Department of the
Treasury and the Department of State cooperated in the negotia-
tion of the proposed Protocol and related Agreement, and the De-
partment of the Treasury joins the Department of State in recom-
mending 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.
H
ILLARYRODHAMCLINTON.
Enclosures: as stated.
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(VII)
OVERVIEW
The proposed Protocol amending the Convention between the
United States of America and the Swiss Confederation for the
Avoidance of Double Taxation with Respect to Taxes on Income
(‘‘proposed Protocol’’) and the related agreement effected by ex-
change of notes (‘‘related Agreement’’) were negotiated to bring the
existing convention (‘‘existing Convention’’), signed in 1996, into
closer conformity with current U.S. tax treaty policy regarding ex-
change of information and to include mandatory arbitration proce-
dures for certain cases that the competent authorities of the coun-
tries have been unable to resolve after a reasonable period of time.
There are, as with all bilateral tax conventions, some variations
from the language of the current U.S. Model Income Tax Conven-
tion. In the proposed Protocol and related Agreement, these minor
differences reflect particular aspects of Swiss law and treaty policy.
However, the proposed Protocol and related Agreement and gen-
erally follow the current U.S. Model Income Tax Convention and
the Organization for Economic Cooperation and Development
standard for exchange of tax information.
EXCHANGE OF INFORMATION
The proposed Protocol and related Agreement would replace the
existing Convention’s tax information exchange provisions with up-
dated rules that are consistent with current U.S. tax treaty prac-
tice. The proposed Protocol and related Agreement allow the tax
authorities of each country to exchange information relevant to car-
rying out the provisions of the Convention or the domestic tax laws
of either country, including information that would otherwise be
protected by the bank secrecy laws of either country.
DISPUTE RESOLUTION THROUGH MANDATORY BINDING ARBITRATION
The proposed Protocol and related Agreement update the provi-
sions of the existing Convention with respect to the mutual agree-
ment procedure by incorporating mandatory arbitration of certain
cases that the competent authorities of the United States and the
Swiss Confederation have been unable to resolve after a reasonable
period of time. The arbitration provisions in the proposed Protocol
and related Agreement are similar to other mandatory arbitration
provisions that have recently been included in other U.S. bilateral
tax treaties and that are currently in force.
INDIVIDUAL RETIREMENT ACCOUNTS
The proposed Protocol updates the provisions of the existing Con-
vention to provide that individual retirement accounts are eligible
for the benefits afforded a pension under the Convention.
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VIII
ENTRY INTO FORCE
The proposed Protocol would enter into force when the United
States and the Swiss Confederation exchange instruments of ratifi-
cation. The proposed Protocol would have effect, with respect to
taxes withheld at source, for amounts paid or credited on or after
the first day of January of the year following entry into force of the
Protocol. With respect to tax information exchange, the proposed
Protocol would have effect with respect to requests for bank infor-
mation to information that relates to any date beginning on or
after the date of signature of the proposed Protocol and, with re-
spect to all other cases, would have effect with respect to requests
for information that relate to taxable periods beginning on or after
the first day of January of the year following the date of signature.
The mandatory arbitration provision would have effect with respect
both to cases that are under consideration by the competent au-
thorities as of the date on which the Protocol enters into force and
to cases that come under consideration after that date. The related
Agreement would enter into force on the date of entry into force of
the proposed Protocol and would be annexed to the Convention as
Annex A thereto and would be an integral part of the Convention.
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IX
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X
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XI
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XII
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XIII
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XIV
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XV
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XVI
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XVII
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XVIII
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XIX
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XX
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XXI
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XXII
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XXIII
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XXV
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XXVII
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XXVIII
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