clear to recommend to Congress a modification of these statutes so as to provide for the exemption of Danish and Icelandic shipowners from the payment of income taxes for the years 1917 to 1920 inclusive. Accept, Sir, the renewed assurances of my highest consideration. Mr. CONSTANTIN BRUN, No. 236 SIR: Minister of Denmark. CHARLES E. HUGHES The Danish Minister to the Secretary of State ROYAL DANISH LEGATION WASHINGTON, August 18, 1922 By my letter of August 12th (No. 230) regarding an exchange of notes between the Government of Denmark and the Government of the United States for the reciprocal exemption of shipowners from income tax, I stated it to be the understanding of the Danish Government that this exemption when established would be as from January 1st 1921, notwithstanding the fact that the actual exchange of notes can not be arranged for until some time hence because the conditions stated in your note to me of August 9th must first be brought to the knowledge of the Danish Government. I would be greatly obliged to you if you would be so good as to confirm to me the correctness of the above named understanding. I have the honor to be, Sir, with the highest consideration, The Honorable CHARLES EVANS HUGHES, Secretary of State, Department of State, Washington, D. C. C. BRUN No. 284 SIR: The Danish Minister to the Secretary of State ROYAL DANISH LEGATION WASHINGTON, October 24th 1922 With further reference to your reply-note of August 9th 1922 relative to the reciprocal exemption of shipowners from income tax as from January 1st 1921, in accordance with Section 213 b 8 of the Revenue Act of 1921, and pursuant to instructions now received from the Danish Minister of Foreign Affairs, I have the honor to declare on behalf of the Danish Government that the income from sources in Denmark and Iceland of a citizen of the United States or of an American corporation, which consists exclusively of earnings derived from the operation of ships documented under the laws of the United States, is not subject to income taxation in Denmark or in Iceland. In these circumstances I venture to hope that you will state in a note to me, for the information of the Danish Government, that Denmark and Iceland satisfy the equivalent exemption provision of Section 213 b 8 of the Revenue Act of 1921 and that Danish and Icelandic shipowners will be exempted from income tax in the United States as provided in the said Section as from January 1st 1921, in accordance with the letter (No. 236) which I had the honor to address to you on August 18th 1922. I have the honor to be, Sir, with the highest consideration, I have the honor to refer to your note of August 18, 1922, in which, with reference to the proposed exchange of notes between the United States and Denmark for the reciprocal exemption of ship owners from income taxation, you request the Department to confirm the understanding of the Danish Government that this exemption, when established, would be as from January 1, 1921, notwithstanding the fact that the actual exchange of notes can not be arranged until some later date. I have the honor to state that upon receipt of a note from the Danish Government declaring that the income from sources in Denmark and Iceland of a citizen of the United States or of an American corporation, which consists exclusively of earnings derived from the operation of ships documented under the laws of the United States, has since January 1, 1921, not been subject to income taxation in Denmark, or in Iceland, the Treasury Department will issue a statement that Denmark and Iceland satisfy the equivalent exemption provision of Section 213(b) (8) of the Revenue Act of 1921. In case income taxes have been collected by this Government from non-resident aliens or foreign corporations on income which consists exclusively of earnings derived since January 1, 1921, from the operation of ships documented under the laws of Denmark or Iceland, such taxes will be refunded to claimants. Accept, Sir, the renewed assurances of my highest consideration. For the Secretary of State: WILLIAM PHILLIPS Mr. CONSTANTIN BRUN, No. 290 Minister of Denmark. The Danish Minister to the Secretary of State ROYAL DANISH LEGATION WASHINGTON, October 28th 1922 I have the honor to acknowledge the receipt of your reply-letter of October 25th with reference to the proposed exchange of notes between Denmark and the United States for the reciprocal exemption of shipowners from income taxation, which has evidently crossed my note to you of October 24th on the same subject. In answer thereto I beg to state that the income from sources in Denmark and Iceland of a citizen of the United States or of an American corporation, which consists exclusively of earnings derived from the operation of ships documented under the laws of the United States, is not and has not since January 1st 1921 or previously been subject to income taxation in Denmark, or in Iceland, and that my letter to you of October 24th should be so understood. I have the honor to be, Sir, with the highest consideration, I have the honor to refer to your note of October 28, 1922, in further reference to the proposed exchange of notes between the United States and Denmark for the reciprocal exemption of ship owners from income taxation, for which provision is made in Section 213(b) (8) of the Revenue Act of 1921, and to inform you of the receipt of a communication from the Treasury Department regarding the matter, from which the following paragraph is quoted for your information: "I have the honor to advise that inasmuch as the income from sources in Denmark and Iceland of a citizen of the United States or of a corporation organized therein which consists exclusively of earnings derived from the operation of ships documented under the laws of the United States is not and has not been subject to income tax since January 1, 1921 or previously, it is held that Denmark and Iceland satisfy the equivalent exemption provision of Section 213(b) (8) of the Revenue Act of 1921. In case any Federal income taxes have been collected from nonresident aliens or foreign corporations on income which consists exclusively of earnings derived on or since January 1, 1921, from the operation of ships documented under the laws of Denmark or Iceland, such taxes will be the proper subject of a claim for refund." Accept, Sir, the renewed assurances of my highest consideration. For the Secretary of State: WILLIAM PHILLIPS No. 331 SIR: The Danish Minister to the Secretary of State ROYAL DANISH LEGATION WASHINGTON, December 6, 1922 I have the honor to acknowledge the receipt of your reply-note (undated) received December 5th in which, with reference to my letter of October 28th 1922, you state "that inasmuch as the income from sources in Denmark and Iceland of a citizen of the United States or of a corporation organized therein which consists exclusively of earnings derived from the operation of ships documented under the laws of the United States is not and has not been subject to income tax since January 1, 1921 or previously, it is held that Denmark and Iceland satisfy the equivalent exemption provision of Section 213(b)(8) of the Revenue Act of 1921”. and that "in case any Federal income taxes have been collected from nonresident aliens or foreign corporations on income which consists exclusively of earnings derived on or since January 1, 1921, from the operation of ships documented under the laws of Denmark or Iceland, such taxes will be the proper subject of a claim for refund". I have at once advised the Danish Government accordingly and beg to express my very great appreciation of your courteous assistance to arrive at the desired solution of this part of the taxation question. I have the honor to be, Sir, with the highest consideration, The Honorable CHARLES EVANS HUGHES, Secretary of State, Department of State, Washington, D. C. C. BRUN |