FROM THE OFFICE OF PUBLIC AFFAIRS

November 18, 2004
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Treasury Applauds Senate Approval of Protocol Amending
U.S.-Netherlands Tax Treaty

 The Treasury Department welcomes the Senate's action yesterday to approve the protocol amending the U.S. income tax treaty with the Netherlands.

"The protocol approved by the Senate last night will improve the long-standing tax treaty relationship between the United States and the Netherlands," said Secretary John W. Snow.  "These enhancements to the tax treaty will foster still closer economic ties between our two countries, bringing benefits to both countries by further reducing tax barriers to real cross-border trade and investment in both directions."

The protocol amends the existing U.S.-Netherlands tax treaty, which entered into force in 1993, to take into account developments over the last decade, including changes in each country's tax laws and tax treaty policies. Key provisions in the protocol include the modernization of the anti-treaty shopping rules to prevent inappropriate exploitation of the treaty and the elimination of source-country withholding taxes on certain cross-border intercompany dividends.

The protocol amending the U.S.-Netherlands tax treaty will enter into force when the two countries have notified each other that their respective requirements for ratification have been completed.

The approval of the protocol by the Senate follows a hearing held by the Senate Committee on Foreign Relations on September 24 on both this protocol and a protocol amending the U.S.-Barbados tax treaty.  The Senate approved the protocol amending the U.S.-Barbados tax treaty on October 11.

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