Announcement related to income tax treaty references to the NAFTA in light of its pending replacement by the USMCA.
Upon the USMCA's entering into force, for purposes of applying an applicable U.S. income tax treaty, the Department of the Treasury (“Treasury Department”) and the Internal Revenue Service (“IRS”), including the U.S. Competent Authority, believe that any reference to the NAFTA in a U.S. bilateral income tax treaty should be interpreted as a reference to the USMCA. The USMCA modernizes and replaces the NAFTA, is entered into by the same parties, and governs the terms of trade among those parties.