U.S. Income Tax Treaty Update

INTRODUCTION

A robust and extensive income tax treaty network has worked to the advantage of U.S. corporations and individuals. But for years, the tax treaty approval process of the U.S. Senate has been stymied by Senator Rand Paul. His opposition arises because of privacy concerns stemming from the Foreign Account Tax Compliance Act, also known as F.A.T.C.A., which was passed in 2010 and his concern that these treaties will lead to unchecked intergovernmental information sharing and snooping.

Historically, income tax treaties were ratified by unanimous consent. Senator Paul's decision not to permit ratification by unanimous consent was essentially a threat to filibuster income tax treaties brought to the floor of the Senate for a vote.