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 PDF

U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON
:
1
99–112
SENATE
" !
111THCONGRESS
2d Session
TREATYDOC.
2010
111–8
PROTOCOL AMENDING TAX CONVENTION WITH
LUXEMBOURG
MESSAGE
FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
PROTOCOL AMENDING THE CONVENTION BETWEEN THE GOVERN-
MENT OF THE UNITED STATES OF AMERICA AND THE GOV-
ERNMENT 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
NOVEMBER15, 2010.—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,
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 Luxem-
bourg (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 re-
lated 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 Conven-
tion and the Organization for Economic Cooperation and Develop-
ment standards for exchange of tax information.
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, August 3, 2010.
THEPRESIDENT,
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 Govern-
ment 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 In-
come 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 Pro-
tocol and related agreement were negotiated to bring the existing
income tax Convention with Luxembourg (the ‘‘existing Conven-
tion’’) into closer conformity with current U.S. tax treaty policy re-
garding the exchange of tax information; and in recognition of the
importance of the United States’ economic relations with Luxem-
bourg. 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 Conven-
tion and the Organization for Economic Cooperation and Develop-
ment 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 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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VI
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 Conven-
tion, signed in 1996 (existing Convention), into closer conformity
with current U.S. tax treaty policy regarding exchange of informa-
tion. There are, as with all bilateral tax conventions, some minor
variations from the language of the U.S. Model Income Tax Con-
vention. 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 agree-
ment generally follow the current U.S. Model Income Tax Conven-
tion and the Organization for Economic Cooperation and Develop-
ment standards for exchange of tax information.
Exchange of information
The proposed Protocol replaces the existing Convention’s tax in-
formation exchange provisions with updated rules that are con-
sistent 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 do-
mestic tax laws of either country. Among other things, the pro-
posed Protocol would allow the United States to obtain information
from Luxembourg whether or not Luxembourg needs the informa-
tion for its own tax purposes, and provides that requests for infor-
mation cannot be declined solely because the information is held by
a bank or other financial institution. The proposed related agree-
ment effected by exchange of notes sets forth agreed under-
standings between the parties regarding the updated provisions on
tax information exchange, including that:
•the United States and Luxembourg will ensure that their re-
spective 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 enti-
ties; 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 Con-
vention on that date.
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