Lugar Welcomes Passage Of US Tax Treaties

by Mike Godfrey, Tax-News.com, Washington

20 July 2010

US Senator Dick Lugar has praised the Senate for giving its advice and consent to the US-Malta tax treaty and the protocol amending the existing US-New Zealand tax treaty.

“As the United States considers how to create jobs and maintain economic growth, we must strengthen the ability of American businesses to operate successfully in foreign markets. To this end, the US government has attempted to facilitate exports through a number of strategies, including tax treaties,” Lugar said. “Tax treaties lower effective tax rates for American companies selling American goods overseas while ensuring that foreign companies pay their fair share of taxes when operating in the United States.”

“The tax treaties with Malta and New Zealand strengthen economic and strategic ties to these allies while lowering costs for American businesses,” the Indiana Republican added.

Lugar also continued his call for a US tax treaty with Brazil. “A Brazillian tax treaty is particularly significant due to [the United States’] expansive trade and investment relationship with Brazil. The country represents the largest economy in which the United States does not have a bilateral tax treaty. American companies are currently at a competitive disadvantage when operating in Brazil,” he said.

“A tax treaty reflecting the modern policy principles underlying the internationally recognized Organisation for Economic Cooperation and Development (OECD) Model Tax Convention with respect to transfer pricing, information exchange, withholding rates, tax dispute resolution and tax sparing will provide a solid basis for development and growth for these two nations of the western hemisphere. Such a modern tax treaty is supported by numerous US and Brazilian companies as a mutually beneficial way to increase economic output in both nations and deepening our ties,” Lugar noted.

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