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Risch, Crapo, Brady Blast Treasury’s Termination of U.S. Tax Treaty in Pursuit of OECD Tax Agreement

Members criticize Treasury’s go-it-alone approach, once again urge bipartisan consultation with Congress

WASHINGTON – U.S. Senators Jim Risch (R-Idaho), ranking member of the Senate Foreign Relations Committee, and Mike Crapo (R-Idaho), ranking member of the Senate Finance Committee, and U.S. House Ways and Means Republican Leader Kevin Brady (R-Texas) yesterday wrote to the U.S. Department of the Treasury and the U.S. Department of State, blasting Treasury’s termination of the longstanding U.S./Hungary tax treaty in retaliation for Hungary’s opposition to the OECD Agreement, again noting Treasury’s failure to appropriately consult Congress regarding tax treaties. The Senate Foreign Relations Committee has jurisdiction over treaties, and the Senate Finance Committee and House Ways and Means Committee have jurisdiction over tax matters. 

From the letter:

“Given the Administration’s stated commitment to strengthen the U.S. tax treaty network, Treasury’s decision to unilaterally withdraw from a longstanding U.S. treaty without any meaningful Congressional consultation is particularly alarming.  . . . Treasury’s actions suggest an impulsive attempt to pressure a country that has raised legitimate concerns with the agreement to fall in line.

“[T]he Administration must view the actions of countries like Russia and Belarus as more offensive than a country’s mere opposition to a global tax agreement that tax administrations and experts have openly questioned and criticized.  The Administration’s inconsistent treatment of our current treaty partners further highlights the flaws in Treasury’s stated justification. 

“In its negotiations of the OECD global tax agreement, this Administration has repeatedly overstepped its bounds without appropriate Congressional consultation as part of its “at all costs” approach.  However, U.S. tax treaties should not be used as a unilateral, retaliatory tool by an Administration to advance its domestic agenda.

“We urge the Administration to withdraw its termination of the Treaty and promptly consult with Congress on a bipartisan basis to address any concerns with the Treaty or any other of the United States’ current bilateral tax treaties.” 

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