811.512351 Shipping/13
The Secretary of State to the French Chargé ( Sartiges )
Sir: With further reference to your Embassy’s note of June 11, 1927, relative to the proposed reciprocal exemption from taxation by the Governments of the United States and France of the income of French and American nationals derived from shipping, I have the honor to inform you that I am now in receipt of a communication from the Treasury Department dated July 7, 1927, concerning the matter, from which I quote the following:
“I have the honor to acknowledge receipt of your letters dated June 18, 1927 (SO 811.512351 Shipping/10) and June 23, 1927 (SO 811.512351 Shipping/11),19 with further reference to previous correspondence relative to the proposed reciprocal exemption from taxation by the Governments of the United States and France of the income of French and American nationals respectively, derived from the operation of ships. Attached to your letter of June 18, 1927, there is a copy of a despatch dated May 24, 1927, from the American Embassy at Paris, enclosing a copy and translation of a decree of the [Page 707] French Government dated May 20, 1927,20 exempting the income of American ship owners from taxation. Attached to your letter of June 23, 1927, there is a copy of the decree issued by the French Government on May 20, 1927, and published in the Official Journal of the French Republic of May 23 and 24, 1927.
You request to be informed whether the decree is satisfactory, in order that you may advise the Chargé d’Affaires of the French Embassy that French citizens, not residents in the United States and French corporations will be exempt from income taxes on profits derived from shipping.
The decree adopted May 20, 1927, follows the wording of the decree submitted to this Department with your letter of March 26, 1927.21 You were advised on April 9, 1927,22 that the decree if adopted in the form submitted would meet the equivalent exemption requirements of section 213 (b) (8) of the Revenue Acts of 1921, 1924, and 1926. The Chargé d’Affaires states in his note that the decree goes into immediate effect in France.
I have the honor to advise you that in view of the fact that the French Government has adopted the decree in the form submitted and it is now in effect, it is held that France satisfies the equivalent exemption provision of section 213 (b) (8) of the Revenue Acts of 1921, 1924 and 1926.”
It will be observed that the Treasury Department holds that in view of the fact that the French Government has adopted a decree of exemption which is now in effect, the French Government has satisfied the equivalent exemption provision of Section 213 (b) (8) of the Revenue Acts of 1921, 1924, and 1926.
Accept [etc.]