2006 amendments to the Germany-United States tax treaty become effective

The 2006 protocol to the 1989 Germany-United States tax treaty entered into force in December 2007, and its provisions became effective in 2007 or 2008. The most comprehensive amendments made by the protocol pertain to the limitation on benefits article of the treaty, although as a practical matter, the central aspect of the protocol is the withholding tax on cross-border dividends. This article examines both of these changes as well as the other amendments made by the 2006 protocol, including the addition of new Art. 18A regarding pension plans, the revised provisions pertaining to hybrid structures and permanent establishments and the introduction of a mandatory arbitration provision for resolving tax disputes.