Tax treaty update - Senate approval of Swiss treaty blocked 

May 22:  Senate Foreign Relations Committee Chairman Bob Menendez (D-NJ) today moved that the Senate approve the pending Protocol amending the tax convention with the Swiss Confederation, but Sen. Rand Paul (R-KY) objected to the unanimous consent motion. Paul contended the information exchange provisions of the Swiss Protocol (and others) are an encroachment on Americans’ right to privacy.

Unanimous consent motions are the customary procedure for Senate approval of tax treaties, and any senator may prevent approval by objecting. A two-thirds vote is otherwise required by the Treaty Clause of the Constitution for approval.

The Senate Foreign Relations Committee has approved and reported five tax treaties that are awaiting Senate approval–agreements with Switzerland, Luxembourg, Hungary, and Chile, and the Protocol amending the OECD convention on mutual administrative assistance in tax matters. Read TaxNewsFlash-United States (February 2014). Approval of these agreements faced similar objection last year.

The Swiss Protocol was signed on September 23, 2009. New tax agreements with Poland and Spain also have been signed and transmitted to the Senate, where they await action by the Foreign Relations Committee.

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