811.512351 Double/362

The Chargé in France (Wilson) to the Secretary of State

No. 390

Sir: I have the honor to refer to the Embassy’s despatch No. 96 of November 10, 1936,15 enclosing a report of the conversations had at Paris with officials of the Ministry of Finance by Mr. Eldon P. King, [Page 286] Special Deputy Commissioner of Internal Revenue, Department of the Treasury, on the subject of double taxation.

There are now enclosed a copy and translation of a note from the Ministry of Foreign Affairs, dated February 19, 1937,16 which refers to those conversations and proposes the commencement of negotiations upon certain fiscal questions the solution of which it is felt should be sought as rapidly as possible, namely, 1) the tax on stock exchange operations of American firms receiving in France orders to be executed on American exchanges, 2) the exemption from the general income tax of American governmental employees residing or domiciled in France, 3) the taxation in the United States of nonresident aliens, and 4) administrative assistance and cooperation with a view to curbing fiscal fraud.

The Department will note that the Ministry has failed to include one of the questions considered by Mr. King as of importance, namely, the extraterritorial effect of the patente tax as applied to branches in France of American banks. (See Department’s instruction No. 1504 of October 13, 1936, file 851.5123 Guaranty Trust Company/20 [21]17 and the Embassy’s reply No. 105 of November 12, 1936.18)

The Ministry of Foreign Affairs is being informed that its note has been referred to the Department for consideration by the competent authorities of the Government.

Respectfully yours,

Edwin C. Wilson