The Secretary of State to the Japanese Ambassador ( Hanihara )

The Secretary of State presents his compliments to His Excellency the Ambassador of Japan and, referring to the note in which he inquired whether the United States Government is granting exemption from income tax to citizens or corporations of any foreign country in compliance with the provisions of Section 213, Paragraph (b), Item 8 of the Revenue Act of 1921, has the honor to say that there has been received from the Secretary of the Treasury a letter dated April 9,2 in which he states that his Department has ascertained that some foreign countries satisfy the equivalent exemption provision of Section 213(b) (8) of the Revenue Act of 1921, and consequently is exempting from tax the incomes from sources in the United States of nonresident [Page 449] aliens or foreign corporations which consist exclusively of earnings derived from the operation of a ship or ships documented under the laws of such countries.

The Secretary of the Treasury adds that the question whether Japan satisfies the equivalent exemption provision of Section 213(b) (8) is now under consideration, and that as soon as the decision is made, the Secretary of State will be advised. When this information shall have been received by the Secretary of State, it will be promptly communicated to the Ambassador.

  1. Not printed.