811.512365Shipping/21
The Secretary of State to the Italian Ambassador (Martino)
The Secretary of State presents his compliments to His Excellency, the Royal Italian Ambassador, and has the honor to acknowledge the receipt of his note of April 24, 1926,3 in further relation to a decree issued by the Italian Government on March 4, 1926, exempting American shipping interests from the income tax of Italy, in which the Ambassador requests to be informed what decision has been taken by the Treasury Department concerning the exemption of Italian shipping interests from the payment of income tax.
In reply, the Secretary of State has the honor to inform the Italian Ambassador that he is in receipt of a communication from the Treasury Department concerning this matter, a copy of which is enclosed,3 from which it will be observed that the Treasury Department holds that in view of the Royal Italian Decree No. 340 of March 4, 1926, Italy satisfies the equivalent exemption provision of Section 213 (b) (8) of the Revenue Acts of 1921, 1924 and 1926, and that consequently so much of the income from sources within the United States received by a non-resident alien or a foreign corporation as consists exclusively of earnings derived from the operation of a ship or ships documented under the laws of Italy is exempt from the Federal income tax.