Subpart A.—Tax Conventions directly or indirectly, by individuals who • Either government may terminate
are residents of Jordan or of another this agreement by giving written notice
JORDON country which grants a reciprocal ex- of termination through diplomatic chan-
emption to U.S. citizens and corpora- nels.
EMBASSY OF tions; or • The Embassy of the United States
THE UNITED STATES OF AMERICA (2) The corporation’s stock is prima- of America takes this opportunity to
AMMAN, JORDAN rily and regularly traded on an estab- renew to the Ministry of Foreign Affairs
APRIL 7, 1988 lished securities market in Jordan, or is of Jordan the assurances of its highest
wholly owned by a corporation whose consideration.
Note No. 078
stock is so traded and which is also
The Embassy of the United States of organized in Jordan. HASHEMITE KINGDOM OF
America presents its compliments to the For purposes of subparagraph 1, the JORDAN
Ministry of Foreign Affairs of Jordan Government of Jordan and its wholly MINISTRY OF
and has the honor to propose that the owned public corporations will be FOREIGN AFFAIRS
two governments conclude an agreement treated as an individual resident of Jor- APRIL 7, 1988
to exempt from income tax, on a recip- dan. For purposes of the exemption
rocal basis, income derived by residents from U.S. tax, subparagraph (1) will be No. 490
of the other country from the interna- considered to be satisfied if the corpora-
tion is a ‘‘controlled foreign corpora- The Ministry of Foreign Affairs of the
tional operation of ships and aircraft.
tion’’ under the Internal Revenue Code. Hashemite Kingdom of Jordan present
The terms of the agreement are as
• Gross income includes all income their compliments to the Embassy of the
follows:
United States of America and have the
• The Government of the United derived from the international operation
honour to acknowledge receipt of their
States of America, in accordance with of ships or aircraft on a full (time or
voyage) basis and income from the Note No. 078 dated April 7, 1988 which
Sections 872(b) and 883 of the Internal reads as follows:
Revenue Code, agrees to exempt from rental of containers and related equip-
ment which is incidental to the interna- [For text of the U.S. note, see above.]
tax gross income derived from the inter- The Ministry have the further honour
national operation of ships or aircraft by tional operation of ships or aircraft. It
also includes income from the rental on to inform the distinguished Embassy
individuals who are residents of Jordan that the foregoing proposal is acceptable
(other than U.S. citizens) and corpora- a bareboat basis of ships and aircraft
used for international transport. to the Government of the Hashemite
tions organized in Jordan. This exemp- Kingdom of Jordan who therefore agree
tion is granted on the basis of equivalent • The Embassy of the United States
that the Embassy’s note together with
exemptions granted by Jordan to citizens of America considers that this Note,
this reply shall constitute an agreement
of the United States (who are not resi- together with the Ministry’s reply Note
between the two governments which
dents of Jordan) and to corporations confirming that the Government of Jor-
shall amend the agreement of April 17,
organized in the United States (which dan agrees to these terms, constitutes an
1973 and June 20, 1974 and shall enter
are not subject to tax by Jordan on the agreement amending the agreement of
into force on the date of this reply.
basis of residence). April 17, 1973 and June 20, 1974.1 This
The Ministry of Foreign Affairs of the
• In the case of a corporation, the agreement shall enter into force on the
Hashemite Kingdom of Jordan avail
exemption shall apply only if the corpo- date of the Ministry’s reply Note and
shall have effect with respect to taxable themselves of this opportunity to renew
ration meets either of the following to the Embassy of the United States of
conditions: years beginning on or after January 1,
1987. America the assurances of their highest
(1) More than 50 percent of the value consideration.
of the corporation’s stock is owned, 1
TIAS 8002; 26 UST 16.