Important Changes

New tax treaties. The United States has exchanged instruments of ratification for new income tax treaties with Denmark, Luxembourg, and Ukraine. The new treaties with Denmark and Luxembourg replace existing treaties. Both the old and new provisions are discussed for those countries. The effective dates of the new treaties are as follows.

Denmark. The provisions for taxes withheld at source are effective for amounts paid or credited on or after May 1, 2000. For other taxes, the provisions are effective for tax years beginning on or after January 1, 2001. If you were entitled to benefits under the previous treaty with Denmark, you can elect to apply the old treaty in its entirety for one year following the date the new treaty would otherwise apply.

Luxembourg. The provisions for taxes withheld at source are effective for amounts paid or credited on or after January 1, 2001. For other taxes, the provisions are effective for tax years beginning on or after January 1, 2001. You can elect to apply the old treaty in its entirety for one year following the date the new treaty would otherwise apply.

Ukraine. The provisions for taxes withheld on interest, dividends, and royalties are effective for amounts paid or credited on or after August 1, 2000. For other taxes, the provisions are effective for tax periods beginning on or after January 1, 2001.

Previously, residents of Ukraine were covered under the treaty between the United States and the former Soviet Union. You can elect to have that treaty apply in its entirety for the first tax year the new treaty would otherwise apply. A person claiming benefits under Article III(1)(d) of the U.S-Soviet Union treaty can elect to have the treaty apply in its entirety for the duration of the period of benefits provided by that subparagraph.

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