U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

29–112 

" ! SENATE 108TH CONGRESS

2d Session 

TREATY DOC. 

2004

108–26 

SECOND PROTOCOL AMENDING TAX CONVENTION 

WITH BARBADOS 

MESSAGE 

FROM

THE PRESIDENT OF THE UNITED STATES 

TRANSMITTING

SECOND PROTOCOL AMENDING THE CONVENTION BETWEEN THE 

UNITED STATES OF AMERICA AND BARBADOS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL 

EVASION WITH RESPECT TO TAXES ON INCOME SIGNED ON DECEMBER 31, 1984, SIGNED AT WASHINGTON ON JULY 14, 2004; 

INCLUDING AN EXCHANGE OF NOTES WITH ATTACHED UNDERSTANDINGS 

SEPTEMBER 13, 2004.—The Protocol was read the first time, and together 

with the accompanying papers, referred to the Committee on Foreign 

Relations and ordered to be printed for the use of the Senate 


E:\Seals\Congress.#13
(III)

LETTER OF TRANSMITTAL 

THE WHITE HOUSE, September 13, 2004. 

To the Senate of the United States: 

With a view to receiving the advice and consent of the Senate to 

ratification, I transmit the Second Protocol Amending the Convention Between the United States of America and Barbados for the 

Avoidance of Double Taxation and the Prevention of Fiscal Evasion 

with Respect to Taxes on Income Signed on December 31, 1984, 

signed at Washington on July 14, 2004. Also enclosed for the Senate’s information is an exchange of notes with attached Understandings, which provide clarification with respect to the application of the Convention, as amended, in specified cases. Also transmitted for the information of the Senate is the report of the Department of State with respect to the Protocol. 

The Protocol updates the existing Convention to bring it into 

close conformity with current U.S. tax treaty policy and to ensure 

that the Convention cannot be used inappropriately to secure tax 

reductions in circumstances where there is no risk of double taxation. The Protocol would modernize the Convention’s anti-treatyshopping provision. The Protocol also updates the Convention to 

take account of a 1996 change in the Internal Revenue Code relating to the tax treatment of certain former long-term residents of 

the United States. The exchange of notes with attached Understanding provides guidance to taxpayers and each government regarding the intended interpretation of certain provisions of the 

Convention, as amended. 

I recommend that the Senate give early and favorable consideration to this Protocol and give its advice and consent to ratification. 

GEORGE W. BUSH. 

(V)

LETTER OF SUBMITTAL 

DEPARTMENT OF STATE, August 26, 2004. 

The PRESIDENT, 

The White House. 

THE PRESIDENT: I have the honor to submit to you, with a view 

to its transmission to the Senate for advice and consent to ratification, the Second Protocol Amending the Convention Between the 

United States of America and Barbados for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to 

Taxes on Income Signed on December 31, 1984, signed at Washington on July 14, 2004 (the ‘‘Protocol’’). Also enclosed for the information of the Senate is an exchange of notes with attached Understandings, which provides clarification with respect to the application of the Convention, as amended, in specified cases. 

The proposed Protocol was negotiated to ensure that the Convention, concluded in 1984, cannot be used inappropriately to secure 

tax reductions in circumstances where there is no risk of double 

taxation. The proposed Protocol also updates the Convention to reflect changes in U.S. tax law and to bring the Convention into closer conformity with current U.S. tax treaty policy. 

Article 2 of the proposed Protocol includes a revised ‘‘Limitation 

on Benefits’’ provision, which is designed to deny ‘‘treaty-shoppers’’

the benefits of the Convention. The new provision corresponds 

more closely to those in recent U.S. treaties than did the provision 

in the existing Convention. The new provision also includes enhanced protections against new forms of potential treaty shopping. 

The existing Convention preserves the U.S. right to tax former 

citizens whose loss of citizenship had, as one of its principal purposes, the avoidance of tax. In order to reflect 1996 amendments 

to the applicable provision of the Internal Revenue Code, Article 1 

of the proposed Protocol expands this right to include taxation of 

former long-term residents whose loss of such status had, as one 

of its principal purposes, the avoidance of tax. Article 3 of the proposed Protocol includes a clarification to the operation of the Convention’s information exchange provision. 

The exchange of notes with attached Understanding accompanying the proposed Protocol provides additional explanations and 

guidance regarding the agreed interpretation of the Convention, as 

amended. 

The proposed Protocol will enter into force upon the exchange of 

instruments of ratification. It will have effect, with respect to taxes 

withheld at source, on the first day of the second month next following the date of entry into force. With respect to other types of 

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taxes it will have effect for taxable years beginning on or after January 1 of the year following the date of entry into force. 

The Department of the Treasury and the Department of State cooperated in the negotiation of the proposed Protocol. It has the full 

approval of both Departments. 

Respectfully submitted, 

COLIN L. POWELL. 

(1) 


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