August 2, 2006
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Treasury Announces Entry into Force of Protocol Amending U.S.-Sweden Income Tax Treaty

WASHINGTON, DC - The Treasury Department today announced that the protocol amending the income tax treaty between the United States and Sweden will enter into force August 31, 2006. Under the terms of the protocol, each country is required to notify the other when its constitutional requirements for entry into force have taken place, with the protocol entering into force on the thirtieth day after the second of the required notifications. This process was completed by the delivery of the second such notification on the first of August.

The protocol amends the existing U.S.-Sweden tax treaty, which was concluded in 1994, and takes into account developments over the last decade. The protocol provides for the elimination of source-country withholding taxes on certain intercompany dividends and certain dividends paid to pension funds. The protocol also reflects a modernization of the anti-treaty shopping rules.

The United States and Sweden signed the protocol at a ceremony at the State Department on September 30, 2005. The United States Senate gave advice and consent to ratification of the protocol on March 31, 2006.

With the entry into force of the protocol on August 31, 2006, the protocol generally will be effective for taxable periods beginning on or after January 1, 2007. The provisions of the protocol relating to withholding taxes will be effective for amounts paid or credited on or after October 1, 2006.

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