The Senate of Foreign Affairs examines the tax treaty with Chile

The Senate Foreign Relations Committee has scheduled a March 29 hearing to consider a tax treaty with Chile.

The treaty was originally signed in 2010, but languished for years without ratification following objections from Sen. Rand Paul, R-Ky., Alongside tax treaties for Hungary and Poland and four treaty protocols tax. The Senate eventually overcame Paul’s objections and ratified all four protocols in 2019, but all three treaties were put on hold due to complications stemming from the enactment of the Tax Cuts and Jobs Act.

Treaties need reservations – text or statements dealing with non-compliance with certain provisions – to account for the enactment of base erosion and anti-abuse tax since their writing. Reservation language has been drafted for the treaty with Chile, although it is unclear whether there is enough Senate support for ratification. Tax treaties for Hungary and Poland are also expected to be subject to reservations, and the Foreign Relations Committee has not scheduled any review.

contacts:

David Sites
Partner
Washington National Tax Office
J +1 202 861 4104

Cory Perry
Senior Manager
Washington National Tax Office
J +1 202 521 1509

Dustin stamp
General manager
Washington National Tax Office
J +1 202 861 4144

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