662.11241/34
The Secretary of State to the German Ambassador (Von Prittwitz)
The Secretary of State presents his compliments to His Excellency the German Ambassador and with reference to the Embassy’s note of January 6, 1928, relative to the interpretation of Article XXVII of the Treaty of Friendship, Commerce and Consular Eights, of December 8, 1923, between the United States and Germany, has the honor to advise the Ambassador as follows concerning this matter.
The Treasury Department to whom this matter was presented for consideration and comment states that it perceives no objection to the proposed agreement in so far as it relates to the terms “consular officers” and “suites” as used in Article XXVII of the Treaty. It points out, however, that there is nothing in this Article which confers any exemption of such persons from the excise taxes enumerated in paragraph (3) of the Embassy’s note under acknowledgment, and it adds that it is not believed that the Article affords any basis for such proposed exemption. Article XXVII merely grants the privilege of free entry of articles of personal property of consular officers, their families and suites.
In this relation the Treasury Department points out that Article XIX of the Treaty only contemplates the exemption from taxation of consular officers and employees in consulates levied upon their persons or upon their property and that in the circumstances it can not be considered as entitling such persons to exemption from excise taxes. However, your attention is invited to the fact that German consular officers in the United States, but not German employees of consulates, may be entitled to exemption from excise taxes on account of the provisions [Page 934] of the most-favored-nation clause of Article XVII of the Treaty between the United States and Germany and Article XV of the Treaty of Friendship and General Relations between the United States and Spain of July 3, 1902,70 which provides in part as follows:
“All consular officers, citizens or subjects of the country which has appointed them, shall be exempted … from all National, State, Provincial and Municipal taxes except on real estate situated in, or capital invested in the country to which they are commissioned.”
It is further stipulated in the Article quoted that the exemption from taxation provided for therein shall apply only to consular officers not engaged in professional business, trade, manufacture or commerce and that consular officers so engaged shall be subject to the same taxes as are paid under similar circumstances by foreigners of the most favored nation. German consular officers in the United States could claim, under the provisions of this Article and the Most Favored Nation clause of Article XVII of the Treaty of December 8, 1923, between the United States and Germany, exemption from the payment of excise taxes if American consular officers in Germany are accorded a like exemption. The Department would be glad to consider any observations which the German Government may be disposed to submit on this point.
If the German Government accepts the interpretation that Article XXVII
does not exempt consular officers from the payment of excise taxes, it
is requested that His Excellency, the German Ambassador, confirm the
Secretary of State’s understanding that the agreement between the
American and German Governments in regard to the interpretation to be
placed on Article XXVII of the Treaty of December 8, 1923, shall be as
follows: