811.512362 Shipping/10
The Chargé in Germany (Robbins) to
the Secretary of State
Berlin, September 12,
1924.
[Received September 27.]
No. 734
Sir: With reference to the Department’s
instruction No. 3354, dated March 20, 1924, concerning the taxing by
Germany of earnings derived from the operation of ships documented under
the laws of the United States, I have the honor to report that a
communication was addressed to the Foreign Office on May 5, 1924, in the
sense outlined in the Department’s instruction, and that the Embassy now
has Foreign Office note verbale No. V Steu
1489/B.34881, dated September 3, 1924, in reply, a copy and translation
of which are enclosed herewith.
With reference to the last paragraph of the Department’s instruction
under reference, there are also enclosed herewith a copy of the German
Ordinance of January 5, 1924, and a translated copy of Section 108,
subdivisional, of the Federal Tax Law of Germany. These documents were
furnished the Embassy by the Foreign Office. There is also transmitted
herewith a translation of the former document made by the Embassy.
I have [etc.]
[Enclosure 1—Translation92]
The German Foreign
Office to the Americans
Embassy
No. V Steu 1489/B 34881
Note Verbale
The Foreign Office has the honor to inform the Embassy of the United
States of America, in response to the latter’s Note No. 686 of May
16 last,93 relative
to exemption from income tax of both German and American shipowners,
as follows:
The Federal Minister of Finance is now ready in principle to amend
his order of August 10, 1923, in accordance with the wishes of the
Government of the United States of America as conveyed in the
Embassy’s Note Verbale No. 675 of May 5,
1924, and to cause instructions to be issued to the subordinate
financial authorities that the order of August 10, 1923, is to be
applied to all companies which have their seat in the United States
of America regardless of the location of their management.
[Page 194]
As concerns the conditions for abstention from collection of taxes
from January 1, 1921, referred to in the last-mentioned note verbale, the Foreign Office can only
repeat the statement based on the official findings of the Federal
Minister of Finance and contained in its Note No. V Steu 30 of
January 19, 1924,94—the
statement that since January 1, 1921, the income from the operation
of ships of American shipping companies and citizens who have no
residence in Germany has not been subjected to the German income tax
or corporation tax. Furthermore, the German Government will abstain
from a supplementary collection of taxes for the period since
January 1, 1921, if the American Government grants reciprocity. The
statement previously made by the Foreign Office through the usual
diplomatic channels is a binding official declaration of the German
Government.
The Foreign Office requests the Embassy of the United States of
America to inform its Government of the above and to acquaint the
Foreign Office with the American Government’s attitude as soon as
possible so that, if an agreement is reached between the German and
American Governments, the Federal Minister of Finance may issue
suitable instructions to the financial authorities.
Berlin, September 3,
1924.
[Enclosure 2—Translation95]
The German Minister of
Finance to the State Finance
Offices, Section for Property and Traffic Taxes, Königsberg,
Mecklenburg-Lübeck in Schwerin, Oldenburg,
Schleswig-Holstein in Kiel, Stettin, Unterelbe in Hamburg,
Unterweser in Bremen
Berlin, January 5,
1924.
III C 14722/III D 5
Through a decree dated August 10, 1923 (III C 7412) I have ordered,
on condition of complete reciprocity and with the reservation of
cancellation at any time on the basis of section 108, paragraph 1,
of the Federal Tax Law, that the income derived exclusively from the
operation of ships of companies (juridical persons) whose seat and
place of management is in the United States of America shall not be
subjected to the corporation tax. On the same condition, I declare
myself in agreement that the income derived exclusively from the
operation of ships by citizens of the United States (natural
persons) who have no residence in Germany shall be exempt from the
income tax. I request that the financial offices charged with the
assessment of taxes be informed thereof.
[Page 195]
In case doubt should arise in individual cases, I request that a
report be made thereon.
[Enclosure
3—Translation]
Section 108 of the Federal Tax Law of Germany of
December 13, 191996
In particular cases the Reichsfinanzminister may, wholly or in part,
abate any taxes the collection of which would, with a view to the
circumstances of the case, be unfair, or he may in such cases decree
the taxes already paid to be refunded or credited to account. As
regards specific types of cases, the above authority may be
transferred to the Landesfinanzaemter or to the Finanzaemter.
As regards cases of a specific type, the Reichsfinanzminister may,
for reasons of fairness and with consent of the Reichsrat, generally
provide for exemption from, or reduction of taxes as well as for
taxes already paid to be refunded or credited to account.
