811.512351 Double/338
The Ambassador in France (Straus) to the Secretary of State
[Received June 12.]
Sir: Referring to my despatch No. 2673 of April 9, 1936,50 I have the honor to report that, in application of Article IX of the double taxation convention between the United States and France, a decree dated May 22 was drawn up and published in the Journal Officiel of May 25, 1936. This decree has the effect of exempting American corporations or citizens, under the conditions laid down in the Convention, from the tax on sums paid them for the use of patents, secret processes and formulas, trademarks, et cetera, from the tax on income from copyright royalties and from that on private pensions and life annuities.
The mechanism employed in legalizing this exemption is the “completion” of previous pertinent decrees by the addition of mention of the United States among the countries benefiting from exoneration as regards the taxes in question. Thus the present decree “completes” Article 3 of the decree of December 21, 1934 (published in the Journal Officiel of December 25, 1934) and Article 1 of the decree of April 27, [Page 112] 1935 (published in the Journal Officiel of May 2, 1935, entitled “Collection of the tax on wages and salaries, pensions and life annuities, and of the tax on non-commercial revenues due from taxpayers not domiciled in France nor having permanent professional installations there.” The above-cited articles of decree provide that:
Sums, the payment of which enters into the competence of establishments owned outside of France by enterprises having their seat in France, notably life annuity dividends coming from agencies or branches operated outside of continental France by French life insurance enterprises, are not subject to the deduction at the source provided for by Article 1.
Likewise exempted from the deduction or collection at the source provided for in Articles 1 and 2 are: (here follows a citation of exceptions including those arising from agreements with Germany, Italy and Belgium.)
Respectfully yours,
- Not printed.↩