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									Subpart A.—Tax Conventions                    Emirates proposes that, if the foregoing is         (2) Income from the rental on a bare-
                                              acceptable to the Government of the           boat basis of ships or aircraft used in in-
UNITED ARAB EMIRATES                          United States, this note and the State De-    ternational transport.
                                              partment’s note in reply shall constitute           (3) Income from the rental of con-
      UNITED ARAB EMIRATES                    an Agreement. The Agreement shall have        tainers and related equipment used in in-
           MINISTRY OF                        effect with respect to taxable years begin-   ternational transport that is incidental to
         FOREIGN AFFAIRS                      ning on or after January 1, 1994.             income from the international operation
           ABU DHABI                             This Agreement shall continue in force     of ships and aircraft, and
        DECEMBER 1, 1997                      until the Government of either contracting          (4) Gains from the sale or other
                                              state gives written notice of termination     alienation of ships or aircraft used in in-
   The Government of the United Arab          of the Agreement to the other Contracting     ternational transport derived by a person
Emirates agrees to exempt from tax gross      State through Diplomatic Channels.            primarily engaged in the international op-
income derived from the international op-                                                   eration of ships or aircraft.
eration of ships or aircraft by individuals                                                    The Government of the United Arab
who are residents of the United States           The Embassy of the United States of        Emirates proposes that, if the foregoing is
(other than citizens of the United Arab       America presents its compliments to the       acceptable to the Government of the
Emirates) and corporations which are in-      Ministry of Foreign Affairs of the United     United States, this note and the State De-
corporated in the United States, this ex-     Arab Emirates and has the honor to refer      partment’s note in reply shall constitute
emption is granted on the basis of equiva-    to the Ministry’s Note No. 3/1/73/8742        an agreement. The agreement shall have
lent exemptions granted by the United         dated October 7, 1997, covering a draft       effect with respect to taxable years begin-
States to individual residents of the         note from the Ministry of Finance and In-     ning on or after January 1, 1994.
United Arab Emirates and to corporations      dustry, which reads as follows:                  This agreement shall continue in force
organized in the United Arab Emirates.                                                      until the government of either contracting
                                              BEGIN TEXT                                    state gives written notice of termination
   For the purposes of exemption from the
U.S. tax, the government of the United           The Government of the United Arab          of the agreement to the other contracting
Arab Emirates will be treated as an indi-     Emirates agrees to exempt from tax gross      state through diplomatic channels.
vidual resident of the United Arab Emi-       income derived from the international op-
                                                                                            END TEXT
rates.                                        eration of ships or aircraft by individuals
   In this agreement:                         who are residents of the United States           The Embassy, on behalf of the Govern-
   (A) The terms “contracting state” and      (other than citizens of the United Arab       ment of the United States of America,
“other contracting state” mean the United     Emirates) and corporations which are in-      confirms its acceptance of the terms of the
Arab Emirates or the United States of         corporated in the United States. This ex-     Ministry’s note with the understanding
America, the Governments of which have        emption is granted on the basis of equiva-    that in the case of a United Arab Emirates
concluded this agreement.                     lent exemptions granted by the United         corporation, the exemption from U.S. tax
   (B) Gross income includes all income       States to individual residents of the         shall apply only if the corporation meets
derived from the international operation      United Arab Emirates and to corporations      the ownership or public trading require-
of ships or aircraft, including:              organized in the United Arab Emirates.        ments of U.S. law. Therefore, the Min-
      (1) Income from the rental on full         For the purposes of exemption from the     istry’s note and this note in reply consti-
(time or voyage) basis of ships or aircraft   U.S. tax, the Government of the United        tute an agreement which shall enter into
used in international transport.              Arab Emirates will be treated as an indi-     force on December 1, 1997, and shall
      (2) Income from the rental on a bare-   vidual resident of the United Arab Emi-       have effect with respect to taxable years
boat basis of ships or aircraft used in in-   rates.                                        beginning on or after January 1, 1994.
ternational transport.                           In this agreement:                            This agreement shall continue in force
      (3) Income from the rental of con-         (A) The terms “contracting state” and      until the government of either contracting
tainers and related equipment used in in-     “other contracting state” mean the United     state gives written notice of termination
ternational transport that is incidental to   Arab Emirates or the United States of         of the agreement to the other contracting
income from the international operation       America, the governments of which have        party through diplomatic channels.
of ships and aircraft, and                    concluded this agreement.                        The Embassy of the United States of
      (4) Gains from the sale or other           (B) Gross income includes all income       America avails itself of this opportunity to
alienation of ships or aircraft used in in-   derived from the international operation      renew to the Ministry of Foreign Affairs
ternational transport derived by a person     of ships or aircraft, including:              the assurances of its highest considera-
primarily engaged in the international op-          (1) Income from the rental on full      tion.
eration of ships or aircraft.                 (time or voyage) basis of ships or aircraft
   The Government of the United Arab          used in international transport.

								
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