Foreign Relations of the United States, 1948, General; the United Nations, Volume I, Part 1

IO Files: US(P)/A/260

United States Delegation¹ Position Paper

restricted

[Paris,] November 17, 1948.

Report of the Fifth Committee on Tax Equalization: Staff Assessment Plan

1. United States Position

The United States Delegation should vote in favor of the Resolutions recommended by Committee 5.² It may be necessary to speak on this subject in the event that the Delegations attack one of the four resolutions proposed in connection with the Tax Equalization Staff Assessment Plan.

2. History in Committee

Failure of the United States Congress to ratify the Convention according income tax immunity for their income from the United Nations to United States nationals serving with the Secretariat has necessitated each year a decision by the General Assembly to reimburse staff members for such national taxes. This procedure has resulted in continuing charges against the United States that the United States Treasury was benefiting as a result of payments by other Members of the United Nations. The United States has indicated that complete tax immunity for its nationals was repugnant to basic American principles. The Delegation has reserved its position on the tax immunity question and has abstained from voting on the question of reimbursement of taxes. The Staff Assessment Plan developed by the Secretariat and a Committee of Tax Experts,³ including an expert from the United States Government, is an effort to deal with this problem by levying an assessment against each member of the United Nations staff at rates between those of the United States and the higher Canadian rates. To make this plan meaningful, the United States Government will be expected to provide tax immunity for its nationals or provide that assessments paid to the United Nations may be offset against taxes due the United States Government.

The purpose of Resolution A is to adopt a tax plan; Resolution B to readjust salaries from the present “net” to a gross basis; and Resolution C calls on Governments to take necessary legislative action to protect their nationals from liability for double taxation. Resolution D authorizes the Secretary-General to continue reimbursements of staff members for national income taxes on United Nations salaries pending the acceptance of the Convention by Members or the enactment of necessary double-taxation legislation.

3. Possible Developments in the Plenary Meeting

In the event the resolutions are voted separately, the United States should abstain on Resolution D but should vote for Resolutions A, B, and C. The Belgium [sic] and Russian Delegations may oppose the assessment plan in general. Belgium and France may oppose merely Resolution D on the grounds that some pressure on the United States Congress is required to induce it to agree to exemption of United States nationals from taxation. If possible, the United States should avoid speaking on this question, but if it becomes apparent that no other Government is prepared to defend the draft resolutions, the United States should speak on the specific arguments raised, following the general statement of position previously made by Mr. Gross in Committee 5 (attached).⁴ A general statement is also attached.⁵

1. The Third Regular Session of the General Assembly (First Part) met at Paris, France, September 21–December 12, 1948. For documentation regarding the composition and organization of the U.S. Delegation to this General Assembly, see pp. 9–21.
2. For texts of the four draft resolutions, see the report of the Fifth Committee on tax equalization in United Nations, Official Records of the General Assembly, Third Session, Part I, Plenary Meetings, Annexes, pp. 310 ff. Hereafter cited as GA(III/1), Plenary, Annexes.
3. The creation of a group of five tax experts was the result of a proposal made initially by the United States delegate in the Fifth Committee, Mr. Ernest A. Gross; see United Nations, Official Records of the General Assembly, Third Session, Part I, Fifth Committee, pp. 51–52.
4. Not attached; for Mr. Gross’ statement, see United Nations, Official Records of the General Assembly, Third Session, Part I, Fifth Committee, pp. 51–52.
5. Not printed. Mr. Gross did not make any statement in the plenary session, the General Assembly adopting the four resolutions without any discussion on November 18 (United Nations, Official Records of the General Assembly, Third Session, Part I, Plenary Meetings, pp. 473–474). Hereafter cited as GA(III/1), Plenary.