U.S. Tax News 2011

U.S. Hungary New DTA

February 2010
The U.S. and Hungary signed on February 4 , 2010 a new double taxation treaty replacing the previous 1979 treaty.
The new treaty includes , inter -alia , maximum rates of withholding taxes , 15% for dividends and interest , zero tax for royalties.
The new treaty is expected to enter into force on 1.1.2011 after being ratified by both countries.
More info www.treas.gov.

U.S. Luxembourg Tax Information Treaty

June 2009
The U.S. and Luxembourg signed on May 21, 2009 a protocol amending the current income tax treaty between the two countries to allow for more robust tax information exchange.
The treaty which incorporates the OECD tax treaty standard on exchange of information for tax purposes will enable the U.S. to seek information from Luxembourg on federal taxes, and both civil and criminal matters , regarding taxable years beginning on or after 2009.
Source : www.ustreas.gov/press/releases/tg143.htm

U.S. Gibraltar Exchange of Tax Information Agreement

April 2009
The U.S. and Gibraltar signed on March 31, 2009 an agreement allowing for exchange of tax information between the two countries.
The Tax Informatio Exchange Agreement, TIEA , was signed in London ahead of G20 Leaders Summit.
The TIEA agreement provides the U.S. access to information needed to enforce U.S. tax laws, including information related to bank accounts in Gibraltar.
The new agreement is in line with president Obama's 2010 budget calling for commitment to reduce international tax avoidance.
You can find more detailed info in www.ustreas.gov/press/releases/tg77/htm.

90% Tax on AIG Bonuses

March 2009
The House passed a bill on March 19, 2009 imposing 90% tax on big bonuses paid to AIG senior employees.
The tax would be imposed on employees having a family income above $250,000.
The bill relates to companies receiving at least $ 5 billion in government bailout money, including Fannie Mae, Freddie Mac and others.

Tax Credit for First Time House Buyers

March 2009
From 1.1.2009 a tax credit of up to $ 8,000 is granted to first time house buyers.
The credit does not have to be repaid.
Article by NHAB, National Association of House Builders.

U.S. France Protocol to Income Tax Treaty

January 2009
The U.S. and France signed on January 13, 2009 a protocol updating the current 1994 income tax treaty between the two countries.
The protocol has some significant changes to the current treaty, including, under certain terms, exemption from tax withholding of dividend and cross border royalty payments.
The protocol also rpovides for mandatory arbitration for cases not resolved by the two authorities within a specific period.
It also deals with preventing "treaty shopping", in case of inappropriate use of a tax treaty by third country residents.
For more details please see www.treas.gov.

U.S. Liechtenstein Tax Information Exchange Agreement

December 2008
The U.S. and Liechtenstein signed on December 8, 2008 an agreement to allow exchange of information of tax matters between the two countries.
The tax informatin exchange agreement, TIEA, will provide the U.S. with access to information needed to enforce U.S. tax laws, including information relating to bank accounts in Liechtenstein, and access to information relating to nonresidents in both countries.
The aim of the information can be for tax purposes or for investigaton that could constitue a crime under the law.
The TIEA allows the U.S. to get information relating to 2009 onwards, or even information created before 2009, provided that the request relates to a post 2008 year investigation.
For more details please see the U.S.treasury release.

U.S. and New Zealand Tax Treaty

December 2008
The U.S and New Zealand signed on December 1, 2008 a new protocol updating the tax current tax treaty between the two countries.
The protocol relates, inter-alia, to excluding U.S. social security and unemployment taxes from the "taxes covered" article 2 of the treaty.
The new tax withholding rate for royalties between the two countries will be reduced from 10% to 5%.
The protocol will enter into force after ratification by both countries.
For more details please see www.ustreas.gov

U.S. Malta Double Taxation Treaty

August 2008
The U.S. and Malta signed a new tax treaty on August 8, 2008.
The treaty was signed by U.S. ambassador to Malta and Malta finance minister.
According to the U.S. treasury press room the agreement provides for elimination of tax withholding for cross-border dividend payment to pension funds.
The withholding tax rates for other dividends are 5%/15%.
The withholding tax rates for interest and royalties are 10%.
The treaty will enter into force after ratification by both countries.
For more detailed info please see www.treas.gov

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