Treasury Moves to Update Tax Treaties With Switzerland, Romania, and Vietnam
Treasury has named Switzerland, Romania, and Vietnam as its next income tax treaty updates, following the protocol the U.S. signed with Croatia in April 2026.
The U.S. Treasury Department plans to renegotiate its income tax treaties with Switzerland, Romania, and Vietnam, but no rules have changed yet, and any new agreement is likely years away from taking effect. Rebecca Burch, Treasury’s deputy assistant secretary for international tax affairs, said the department is “working towards” updates with all three countries during remarks at a New York State Bar Association tax conference in June 2026, according to reporting by Bloomberg Tax. The three treaties start from very different places: Romania’s dates to 1973, Switzerland’s was last updated by a 2009 protocol, and the 2015 U.S.-Vietnam treaty was signed but never entered into force.
You can review the current treaty list on the U.S. Treasury Department’s website. For now, the treaties on the books stay exactly as they are, and the Foreign Tax Credit and Foreign Earned Income Exclusion remain the tools that protect most Americans abroad from double taxation.
A tax treaty is a bilateral agreement between two countries that decides which one taxes specific types of income, so the same income is not taxed twice. For a full breakdown, see our U.S. tax treaty guide.
Treasury Plans to Modernize Three More Tax Treaties
A Treasury deputy assistant secretary for international affairs told the conference that, after finishing the Croatia protocol, the department is also pursuing treaty updates with Switzerland, Romania, and Vietnam. The Croatia protocol revised the treaty’s double-taxation relief language to align with current U.S. law, including changes under the 2025 tax legislation, and is the template Treasury appears to be following.
Three points are worth keeping in mind:
- This is an intention, not a signed deal. No new text has been released for any of the three countries.
- The process is long. A treaty or protocol must be negotiated, signed, sent to the Senate for advice and consent, ratified, and only then enter into force. That typically takes years.
- Your current filing is unaffected. Nothing about your 2025 return, filed in 2026, changes as a result of this announcement.
Switzerland, Romania, and Vietnam Each Start From a Different Place
The three countries are in very different positions, which matters for how any update would affect you.
| Country | Current treaty status | What it means for you now |
|---|---|---|
| Switzerland | In force (1996 treaty, 2009 protocol effective 2019) | A modern treaty already applies; an update would refine existing rules |
| Romania | In force since 1973 | One of the oldest U.S. treaties still operating, hence the push to modernize |
| Vietnam | Signed in 2015 but never entered into force | No treaty currently applies, so a deal would create benefits that do not exist today |
If you live in Vietnam, this is the most meaningful of the three. The 2015 treaty was signed but never ratified by the United States, so there is no U.S.-Vietnam income tax treaty currently in effect. Romania’s treaty, by contrast, has been applied since the 1970s, which is exactly why it is on the Treasury’s list to modernize.
Pension Holders and Vietnam-Based Americans Have the Most at Stake
The people most likely to feel a future change are:
- U.S. citizens living in Switzerland, Romania, or Vietnam who rely on treaty articles for pensions, dividends, or specific income types.
- Corporate expats and assignees in these countries whose employers structure pay around treaty positions.
- Self-employed expats and digital nomads in Vietnam currently have no treaty to lean on at all.
- Retirees abroad drawing pensions or Social Security, where treaty wording often decides which country taxes the income.
Treaties Are Not Most Expats’ Main Defense Against Double Tax
Treaties Are Not the Primary Defense Against Double Taxation
Because the U.S. taxes its citizens on worldwide income and nearly every treaty includes a “saving clause” that lets the U.S. keep taxing its own citizens, the Foreign Tax Credit and the Foreign Earned Income Exclusion usually do more practical work than treaty benefits.
A Treaty Update Would Affect Specific Income, Not Your Whole Return
Consider an American living in Switzerland earning $120,000. With the FEIE excluding up to $130,000 for the 2025 tax year ($132,900 for 2026), or a Foreign Tax Credit for the Swiss tax already paid, that salary is generally protected regardless of any treaty change. Where treaties tend to matter is a narrower territory: pension taxation, dividend and interest withholding rates, and tie-breaker rules for residency.
Americans in Vietnam Should Watch This Most Closely
A ratified treaty would be new ground, potentially lowering withholding and clarifying which country taxes what. Until that happens, you still avoid double taxation through the Foreign Tax Credit and the FEIE, reported on your Form 1040.
Keep Filing Under Today’s Rules While Talks Continue
- Keep filing as usual. Report your income and claim relief through the FEIE or the Foreign Tax Credit, whichever fits your situation.
- Track the foreign tax you pay. Good records make the Foreign Tax Credit straightforward on Form 1116 and protect you no matter how treaty talks progress.
- Review pension and investment income. These categories are where a future treaty change is most likely to show up, so know how yours is currently taxed.
- Do not wait for a treaty to get compliant. Any agreement is years away; your filing obligations apply now.
- Talk to an expat tax accountant if you hold a pension, run a business, or earn investment income in Switzerland, Romania, or Vietnam, so your return reflects today’s rules while you watch for tomorrow’s.
We follow treaty developments like these, so your filing always reflects the rules actually in force, not headlines about what might change.
Living in Switzerland, Romania, or Vietnam?
The information in this article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are complex and change frequently. Consult a qualified tax professional regarding your specific situation before taking any action.
