Pending tax treaties and protocols.

• Position: Tax Executives Institute International Tax Committee

On January 12, 1995, Tax Executives Institute urged the Senate Foreign Relations Committee to recommend ratification of seven pending tax treaties and protocols. The Institute's comments are reprinted below. (Similar comments were filed with the 103d Congress last summer.) TEI's comments were prepared under the aegis of its International Tax Committee, whose chair is Philip J. Bergquist of Apple Computer, Inc.

Last year President Clinton forwarded several tax treaties and protocols to the Senate for ratification in respect of the following trading partners of the United States: Canada, France, Kazakhstan, Mexico, Portugal, Sweden, and Ukraine. The 103d Congress adjourned, however, without taking up the treaties and protocols. Because of the importance of the treaties to multinational corporations, Tax Executives Institute urges the Committee on Foreign Relations to schedule a hearing on the treaties and protocols as soon as possible and to recommend ratification by the full Senate. In our view, the primary beneficiaries of the treaties will be - not foreign multinational corporations - but U.S. corporations operating abroad that need a level playing field to compete effectively in the global marketplace.

Tax Executives Institute is the principal association of corporate tax executives in North America. Our nearly 5,000 members represent more than 2,500 of the leading corporations in the United States and Canada. A substantial number of TEI members work for companies that engage in international trade and hence will be affected by the seven treaties and protocols now pending before the Senate.

The U.S. tax treaty network is an important part of the country's framework for international trade. Bilateral treaties play a critical role in bringing certainty to the global marketplace and safeguarding multinational businesses from the threat of double taxation. TEI has long been concerned that arbitrary tax rules restrict the ability of U.S.-based companies to compete effectively abroad and deter foreign investment in the United States. In a perfect world, tax rules would not drive business decisions, but the world is far from perfect. Thus, tax rules can - and do - affect the decisions of multinational corporations, and the affected governments must respond accordingly.

In our view, the country's economic interests are best served when the international "playing field" is as level as possible. This goal can be advanced by removing tax barriers...