Washington, DC – Testifying today before the U.S. Senate Committee on Foreign Relations, Bill Reinsch, President of The National Foreign Trade Council (NFTC) urged the Senate to give its full support to the pending Tax Convention and Protocol with the United Kingdom and the Protocols amending the Tax Conventions with Australia and Mexico.
“We strongly urge the Committee to reaffirm the United States’ historic opposition to double taxation,” said Reinsch. “As global competition grows ever more intense, it is vital to the health of U.S. enterprises and to their continuing ability to contribute to the U.S. economy that they be free from excessive foreign taxes, or double taxation that can serve as a barrier to full participation in the international marketplace. Tax treaties are a crucial component of the framework that is necessary to allow such balanced competition.”
NFTC has long supported the expansion and strengthening of the U.S. tax treaty network. Ratification of the Tax Convention and Protocols with three key trading partners is viewed as an important step in strengthening U.S. competitiveness abroad.
In the absence of tax treaties, income from international transactions or investment may be subject to double taxation. Tax treaties eliminate double taxation by allocating taxing jurisdiction over the income between the two countries, and harmonizing the tax systems of the two countries in respect of persons involved in cross-border investment and trade.
“The United States has lagged behind other developed countries in leveling the playing field for cross‑border investment,” Reinsch continued. “We are particularly hopeful that the Senate will be able to complete its ratification procedures during the month of March so that instruments of ratification will be exchanged before April 1, 2003.”
A copy of Mr. Reinsch’s testimony testimony is available at nftc.org.