The American Ambassador in Cuba ( Braden ) to the Cuban Minister of State ( Martínez )30

No. 148

Excellency: I have the honor to refer to Your Excellency’s note No. 1125 of November 17, 194231 in connection with the general question of tax exemption to be accorded United States undertakings [Page 264] in Cuba. As pointed out in my note No. 811 of November 2, 1942,32 the Government of the United States has consistently maintained that, in accordance with the recognized principles of international law, foreign governments should not be taxed on their personal property in the United States devoted to governmental purposes and exemption from taxation has therefore been granted to plant equipment and supplies used for the production of war materials by private American companies whose operations are financed and controlled by foreign governments. Your Excellency’s Government would appear to have established a similar principle as evidenced by communication No. 2967 of November 11, 194232 from His Excellency the Minister of Hacienda, a copy of which was enclosed with Your Excellency’s note No. 1125.

By agreement and decree of Your Excellency’s Government, the gross sales tax of 2.65% has not been charged the United States Government projects at San Antonio de los Baños, Metals Reserve Corporation stockpile operations at Santiago de Cuba, and certain other similar projects. This tax has, however, been collected on the project which is being carried out by the Nicaro Nickel Company at Preston for the United States Government. Funds for the acquisition and equipment of the plant at Preston are being supplied by the United States Government and, therefore, any Cuban taxes assessed and collected on this project must be paid by the United States Government.

In view of the principles set forth in Your Excellency’s above-mentioned correspondence and of the practice established in connection with other United States Government projects in Cuba, I am sanguine that Your Excellency’s Government will find it possible to exempt the Nicaro Nickel Company development from the 2.65% gross sales tax, whether the work is done by the Nicaro Nickel Company itself, by the Frederick Snare Corporation,33 or by another contractor or agency, since the tax falls ultimately on the United States Government.

Please accept [etc.]

Spruille Braden
  1. Copy transmitted to the Department by the Ambassador in his despatch No. 2125 of February 4; received February 11.
  2. Not printed; this note was dated November 14 and registered for dispatch on November 17.
  3. Not printed.
  4. Not printed.
  5. An engineering and construction firm with headquarters in New York City and wide business interests in Latin America.