MILITARY OBLIGATIONS OF PERSONS HAVING DUAL NATIONALITY Convention signed at Helsinki January 27, 1939 Senate advice and consent to ratification August 1, 1939 Ratifications exchanged at Helsinki October 3, 1939 Entered into force October 3, 1939 Proclaimed by the President of the United States October 7, 1939 54 Stat. 1712; Treaty Series 953 The United States of America and the Republic of Finland, being desirous of regulating the question of exemption from military obligations of persons possessing the nationality of both the High Contracting Parties, have decided to conclude a convention for that purpose, and have appointed as their Plenipotentiaries: The President of the United States of America: Mr. H. F. Arthur SCHOENFELD, Envoy Extraordinary and Minister Plenipotentiary of the United States of America to the Republic of Finland; and The President of the Republic of Finland: Mr. Juho Eljas ERKKO, Minister of Foreign Affairs of the Republic of Finland; Who, having communicated to each other their full powers found to be in good and due form, have agreed as follows: ARTICLE I A person possessing the nationality of both the High Contracting Parties who habitually resides in the territory of one of them and who is in fact most closely connected with that Party shall be exempt from all military obligations in the territory of the other Party. ARTICLE II The present convention shall be ratified and the ratifications thereof shall be exchanged at Helsinki. It shall take effect in all its provisions on the day of the exchange of ratifications and shall continue in force for the term of ten years from that day. If within six months before the expiration of ten years from the day on which the present convention shall come into force, neither High Contracting Party notifies the other of an intention of terminating the convention upon the expiration of the aforesaid period of ten years, the convention shall remain in full force and effect after the aforesaid period and until six months from such a time as either of the High Contracting Parties shall have notified to the other an intention of terminating the convention. In witness whereof, the respective Plenipotentiaries have signed the present convention and have affixed their seals thereto. Done in duplicate, in the English and Finnish languages, both authentic, at Helsinki, this twenty-seventh day of January, nineteen hundred and thirty nine. DOUBLE TAXATION: SHIPPING PROFITS Exchange of notes at Washington June 6, 1946, and January 7, 1947 I have the honor to inform Your Excellency that the Government of Finland is desirous of entering into an agreement with the Government of the United States of America relating to reciprocal exemption from double taxation on shipping profits. With a view to obtaining from the appropriate authorities of the Government of the United States of America a decision that Finland meets the requirements, with respect to reciprocal exemption, of the applicable United States revenue laws, and consequently that the income of Finnish nationals and corporations which consists exclusively of earnings derived from the operation of ships documented under the laws of Finland are exempted from taxation by the United States, I furnish the following information, under the instructions from my Government, with respect to the provisions of Finnish law under which, on the basis of reciprocity, shipping profits of United States nationals and corporations are accorded exemption from Finnish income tax: "The Government is empowered to allow exceptions on the basis of reciprocity from the provisions of this law with regard to the obligatory payment of tax on income derived from abroad and on property located there and also as regards the liability to taxation of a foreign individual as well as of a foreign state, corporation, institution and foundation." (Section 6 of "Law Regarding Tax on Income and Property", enacted November 19, 1943, No. 888). 13 UST 4485; TIAS 2596. The Government of Finland would appreciate, therefore, receiving assurances from the Government of the United States of America with respect to the granting of the tax exemption, as requested above, on a basis of reciprocity. The Government of Finland will consider an agreement to this effect between the two Governments as being concluded and in force beginning with the date specified in Your Excellency's reply note giving such assurances. The Government of Finland will understand that such agreement may be terminated at any time by a six months' notice in writing given by either Government to the other Government. Accept, Excellency, the renewed assurances of my highest consideration. K. T. JUTILA I have the honor to refer to your note dated June 6, 1946, relating to the desire of the Government of Finland to enter into an agreement with the Government of the United States of America relating to reciprocal exemption from double taxation on shipping profits. A copy of your note was sent to the Secretary of the Treasury with a view to obtaining an expression of the views of the Treasury Department with respect to this matter. A letter dated October 30, 1946 has been received from the Treasury Department in which, after references to the Legation's note and to the Finnish income tax law cited in that note, and to section 3 of the Finnish Law of December 5, 1924 on the same subject, it is pointed out that the corresponding provisions of United States income tax law provide in the case of a nonresident alien or foreign corporation for exemption of earnings derived from the operation of ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States of America and to corporations organized in the United States of America. (Section 212 (b) and section 231 (d), Internal Revenue Code.) The Treasury Department's letter contains the following statement: "It is the view of this Department that from the date specified in your reply note to the Finnish Legation, Finland will satisfy the equivalent exemption provisions of section 212 (b) and 231 (d) of the Internal Revenue Code, and hence that the Government of the United States may give to the Government of Finland assurances that the income of Finnish nationals and Finnish corporations which consists exclusively of earnings derived from the operation of ships documented under the laws of Finland will be exempt from United States income tax from such specified date." It is, therefore, the view of the Government of the United States of America that Finland meets the requirements, with respect to reciprocal exemption, of the applicable United States revenue laws, and consequently that the income of Finnish nationals and corporations which consists exclusively of earnings derived from the operation of ships documented under the laws of Finland are exempted from taxation by the United States of America. The Government of the United States of America considers that your note above-mentioned and this reply note constitute an agreement between the two Governments with respect to this matter, it being understood that this agreement, and the exemption from United States taxes to which it relates, shall be deemed to be effective beginning November 19, 1943, the date of the Finnish law cited in your note. It is understood, further, that this agreement may be terminated at any time by a six months' notice in writing given by either Government to the other Government. Accept, Sir, the renewed assurances of my highest consideration. For the Secretary of State: The Honorable Dr. K. T. Jutila, Minister of Finland. WILLARD L. THORP |