Senator Rand Paul is coming under pressure from some multi-national businesses to drop his opposition to tax treaties between the United States and other nations.
Citing privacy concerns about Americans' tax data, Paul, a Republican and libertarian, has single-handedly blocked Senate action on treaties with Hungary, Switzerland and Luxembourg that have been signed by authorities on both sides, but have been awaiting Senate review since 2011.
At least six other tax treaties or treaty updates - with Chile, Spain, Poland, Japan, Norway and Britain - may soon be added to the Senate's queue for confirmation votes.
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Paul has said he is concerned that recent treaties would give foreign governments too much access to U.S. citizens' tax information, a stance that has some support among like-minded conservative libertarians.
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In recent years, tax treaties have begun to play an increasing role in efforts by the United States and major European Union countries to crack down on tax avoidance.
The U.S. Treasury in 2012 began signing new tax pacts with countries as part of implementation of the U.S. Foreign Account Tax Compliance Act, a 2010 anti-tax-evasion law.
The law, known as FATCA, which takes effect in January 2014, will require foreign financial institutions to disclose to the United States information about Americans' accounts worth more than $50,000.
SWISS A DRIVING FORCE
Switzerland, a long-time bastion of banking secrecy, is under international pressure to change its ways, and FATCA has been a driving force in that. The United States and Switzerland in February signed a FATCA implementation agreement that would make more information available to U.S. authorities about the financial interests of Americans in Switzerland.
But the taxpayer information exchange cannot go into force without Senate approval of the U.S.-Swiss tax treaty.
The Senate's delayed action on tax treaties could convince other countries to stop negotiating with the United States on tax matters, said John Harrington, a former Treasury tax official who is now a partner at law firm SNR Denton.
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