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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

France,   pp. 275-318 PDF (16.0 MB)

Page 295

to the French general income tax, as well as to the tax on wages
and salaries.
  Article VIII extends the principle of territoriality to transactions
on stock, security and commodity exchanges.
  Article IX. Inasmuch as the question of mutual administrative
assistance in preventing tax evasion involves consideration of the
laws and policies of the two countries, it is left open for discussion
between their representatives.
  Article X meets the French request that this additional conven-
tion be made applicable as from January 1, 1936 in order to tie it
to the existing convention. The removal of the declaration require-
ment in Article VI of the convention of April 27, 1932 would involve
a removal of the reference thereto in the third paragraph of Article
X of such convention and therefore no reference is made thereto in
the third paragraph of Article X of the present draft. Furthermore,
it is proposed that the third paragraph of Article X of the existing
convention be clarified so as to permit the dismissal of all claims
against American corporations arising under Article 3 of the decree
of December 6, 1872, which are still pending, and especially those
claims which arose subsequently to May 1, 1930, when the negotia-
tions of the existing convention were begun and would therefore not
have arisen if the American corporations had been able to enjoy the
benefits of the convention at that time. This involves recognition of
the fact that the words "finally determined" mean final determina-
tion of liability to tax, whether in principle or as to amount, after all
possibility of recourse to judicial tribunals has been exhausted. It is
also necessary to acknowledge the fact that under Article VI of the
existing convention the tax on income from securities is applicable
to diverted profits only as from January 1, 1936.
  The protocol is modeled after the protocol of the existing conven-
tion and that of the draft convention for the allocation of business
income with appropriate changes in language where necessary or
desirable to clarify or amplify provisions in the protocol of the exist-
ing convention.
811.512351 Double/385
  The Ambassador in France (Bullitt) to the Secretary of State
No. 1165                                   PARIS, October 22, 1937.
                                           [Received November 2.]
  SIR: I have the honor to refer to the Department's instruction No.
467, dated September 24, 1937,24 announcing approaching visits to
" Not printed.

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