Senate Transmits Protocol Amending U.S.-Sweden Tax Agreement for Ratification

The U.S. Senate has received a protocol amending the convention between the U.S. and Sweden for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income. The protocol, which eliminates the withholding tax on certain cross-border dividend payments, was signed on September 30, 2005. In transmitting the protocol for the Senate's advice and consent, President George W. Bush recommended that the Senate give early and favorable consideration to it.

Key Takeaways:

• The protocol eliminates the withholding tax on certain cross-border dividend payments.
• The proposed protocol is one of a few recent U.S. tax agreements to provide for the elimination of the withholding tax on dividends arising from certain direct investments.
• The protocol modernizes the Convention to bring it into closer conformity with current U.S. tax-treaty policy, including strengthening the treaty's provisions preventing so-called treaty shopping.
• The Senate is advised to consider the protocol's provisions carefully to ensure they align with U.S. tax-treaty policy.
• The protocol's elimination of the withholding tax on certain cross-border dividend payments may benefit U.S. businesses investing in Sweden.

Statistics:

• 30 September 2005: The date the protocol was signed.
• 1: The proposed protocol is one of a few recent U.S. tax agreements to provide for the elimination of the withholding tax on dividends.
• U.S. tax treaties: The protocol aims to bring the Convention into closer conformity with current U.S. tax-treaty policy.

Sources:

• United States Senate
• The White House, November 10, 2005 (George W. Bush)
• "Protocol Amending the Convention Between the Government of the United States of America and the Government of Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income"