Groom Comments on Pension Provisions of the US Model Tax Treaty

Groom Law Group has submitted comments to the Treasury Department and the Internal Revenue Service (IRS) on pension provisions of the US Model Tax Treaty.  The comments include the possible elimination of the clause applying the "lesser of" the benefit limits of the two countries for certain corresponding pension plans as unnecessary and difficult to administer, a broader provision for nondiscrimination in the taxation of pension investments in a manner similar to the European Commission, extending the third-state pension provision found in the US-Belgium tax treaty to other tax treaties, and granting greater portability of pensions between corresponding plans of different treaty countries.  We argue that these provisions would foster the goals of the US to reduce or abolish obstacles to the exchange of goods and services across borders.  The comment letter builds upon the June 10, 2009 IRS Advisory Committee on Tax Exempt and Governmental Entities Report on "International Pension Issues in a Global Economy: A Survey and Assessment of IRS' Role in Breaking Down the Barriers", which can be found online at http://www.irs.gov/pub/irs-tege/tege_act_rpt8.pdf.