The U.S. Treasury Department on Friday announced that a long-in-the-works tax treaty with Switzerland has at last been signed and has entered into force, alongside a tax deal with Luxembourg.
The tax treaty had originally been approved by the Swiss Parliament in June, 2010, but had been held up on the U.S. side over concerns that it potentially violated the privacy of individuals whose information, under the agreement, will now be freely exchanged.
The deal means that Washington will now be in a position to request information from the Swiss authorities on American accounts going back ten years.
In a statement on Friday, the Treasury Department said the two protocols would bring the existing tax treaties that the U.S. already has with Luxembourg and Switzerland “into closer conformity with current U.S. tax treaty policy, to allow for greater tax information exchange that will enhance efforts to bolster tax compliance and combat tax evasion.”
The protocols with Luxembourg and Switzerland – in addition to protocols with Japan and Spain that were also signed recently – are the first updates to to the U.S.’s income tax treaty regime in nearly 10 years.