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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa
(1937)

Newfoundland,   pp. 201-202 PDF (665.2 KB)


Page 201


NEWFOUNDLAND
DESIRE OF THE GOVERNMENT OF NEWFOUNDLAND FOR AN AR-
RANGEMENT ACCORDING REDUCTIONS IN RATES OF TAXATION
SIMILAR TO THE CONVENTION BETWEEN THE UNITED STATES AND
CANADA, DECEMBER 30, 19361
811.512343 Double/3
    The British Ambassador (Lindsay) to the Secretary of State
No. 266                             WASHINGTON, August 7, 1937.
  SIR: I have the honour to inform you that a request has been
received from the Governor of Newfoundland, through His Majesty's
Principal Secretary of State for Foreign Affairs, that similar bene-
fits may be extended on a reciprocal basis to Newfoundland holders
of United States securities to those embodied in the reciprocal agree-
ment between the Governments of the United States and the Do-
minion of Canada signed on December 30th last under which the rate
of taxation imposed on dividends and interest coupons payable to non-
residents is limited to 5% for each taxable year.
  In support of this request it is pointed out that income tax in New-
foundland is not deducted from interest and dividends payable abroad.
Companies in Newfoundland are liable to normal tax at a flat rate
but not to super-tax. Dividends paid by companies so taxed are not
further liable to normal tax in the hands of shareholders, whether
resident or non-resident, although they are liable to direct assessment
to super-tax in the hands of individuals (but not companies). Nor
is any deduction of tax at the source made from interest or other
fixed or determinable income paid to non-residents, though taxes due
from a non-resident may be collected from any person who pays such
income to the non-resident.
  In the circumstances it is hoped that the Government of the United
States will be prepared to accede to the request. In that event, I
would appreciate your views as to the method of proceeding.
I have [etc.]                                   R. C. LINDSAY
1 For correspondence on the convention between the United States and Canada,
see Foreign Relations, 1936, vol. I, pp. 790 if.; for text, see Department
of State
Treaty Series No. 920, or 50 Stat. 1399.
                                                       201
982609-54-14


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