DOUBLE INCOME TAX-SHIPPING PROFITS-GERMANY. 2631 The American Embassy at Berlin to the German Ministry jor Foreign _M.,.5.1~~ __ _ Affairs NOTE V ERBALE No. 675 The Embassy of the L"nited States of America presents its compli- ments to the Ministry for Foreign Affairs, and has the honor to refer to the latter's Note Verbale No. V Steu 30/B 2556 of January 19, 1924, concerning the question of the taxing by Germany of earnings derived from the operation of ships documented under the laws of the United States. As will be remembered, the Embassy, by its Note Vcrbale No. 299 of ~farch 2, 1923, informed the Ministry for For- eign Affairs that a copy of the Note Verbale above referred to had been duly transmitted to the Department of State. The Embassy of the United States of America now has the honor to inform the Ministry for Foreign Affairs that an instruction has been received from the Department of State, transmitting a ruling received from the Treasurv Department on this subject, with refer- ence to the Foreign Office's note of January 19, 1924, requesting additional information on the following points: "In the Ordinance of August 10, 1923, it is noted 'that in the case of companies operated for profit, whose domicile and place of manage- ment is in the United States of America, the income which is derived exclusively from the operation of ships, shall not be subjected to the corporation tax. A corporation tax return for the aforesaid income is not to be required of North American companies which maintain in this country a branch or other place of operation or a continuous [permanent] representative.' "Under this provision of the Ordinance of August 10, 1923, it appears that an American corporation whose place of management, for instance, is in London, might possibly be taxed while an American corporation whose place of management is in the Unit,ed States or Germany, would be exempted. In order for individual Germans and German shipping companies to be entitled, under the provisions of American law, to the benefits of reciprocity in the matter of exemption from taxation, it would be necessary for the Ordinance of August 10, 1923, to arply to all corporations organized in the United States re- gardless 0 the place of management. "Moreover, in order to enable the Government of the United States to pass upon the question as to whether equivalent exemption is applicable from January 1, 1921, the Treasury Department states that it will be necessary for the German Government to show that citizens of the United States non-resident as to Germany and domestic corporations have not been subjected to income and corporation tax since January 1, 1921, and the earnings derived from the oferation of ships, and that they are exempt from such taxes and wil not be required to pay the income and corporation tax on any income earned since January 1, 1921." The Embassy of the United States of America begs further, in compliance with the request of the! Department of Stat,e, that an early consideration of its response be given by the Foreign Office. To the MINISTRY FOR FOREIGN AFFAIRS, Berlin. BERLIN, May 5, 192~.
