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					Subpart A.—Tax Conventions                        another country which grants an                   (IV) Gains from the sale or
                                                  equivalent exemption to U.S. cor-                 other alienation of ships or air-
FIJI                                              porations, or the United States,                  craft used in international trans-
                                                                    OR                              port derived by a person prima-
          REPUBLIC OF FIJI                        (II) More than 50 percent of the                  rily engaged in the international
            MINISTRY OF                           value of the corporation’s stock is               operation of ships or aircraft.
          FOREIGN AFFAIRS                         owned directly or indirectly by in-            In the application of this agreement
               SUVA                               dividuals who are residents of Fiji         by a contracting state, any term not
           AUGUST 12, 1996                        or of another foreign country which         defined in this agreement shall, unless
   The Ministry of Foreign Affairs of the         grants an equivalent exemption to           the context otherwise requires, have
Government of the Republic of Fiji                U.S. corporations or by a corpora-          the meaning which it has under the
presents its compliments to the Embassy           tion organized in a country which           laws of that state relating to the taxes
of the United States of America and has           grants an equivalent exemption to           to which this agreement applies.
the honour to refer to the latter’s Note          U.S. corporations and whose stock              The Embassy proposes that if the
No. 64 of June 19, 1996, the text of              is primarily and regularly traded on        foregoing is acceptable to the Govern-
which reads as follows:                           an established securities market in         ment of the Republic of Fiji, this note
      ‘‘The Embassy of the United States          that country, another country which         and the Ministry’s note in reply shall
   of America presents its compliments            grants an equivalent exemption to           constitute an agreement. This agree-
   to the Ministry of Foreign Affairs of          U.S. corporations, or the United            ment shall enter into force on the date
   the Government of the Republic of              States.                                     of the Ministry’s note in reply and
   Fiji and has the honour to propose             For the purpose of exemption from           shall have effect in respect of income
   that the two governments conclude an        the U.S. tax, Subparagraph (II) will           derived on or after January 1, 1996,
   agreement to exempt from income tax         be considered to be satisfied if the           and during all prior years for which
   on a reciprocal basis, income derived       corporation is a ‘‘controlled foreign          the relevant statute of limitations re-
   by residents of the other country from      corporation’’ under the Internal Rev-          mains open on that date.
   the international operation of ships        enue Code.                                        This agreement shall continue into
   and aircraft. The terms of the agree-          In the case of a U.S. corporation,          force until the Government of either
   ment are as follows:                        the exemption shall apply only if the          contracting state gives written notice
      The Government of the United             corporation meets the ownership re-            of termination of the agreement to the
   States of America, in accordance with       quirements under Fiji law.                     Government of the other contracting
   section 872(B) and 883(A) of the               In this agreement:                          state through the diplomatic channel.
   Internal Revenue Code, agrees to ex-           (A) The terms ‘‘contracting state’’,           The Embassy of the United States
   empt from tax gross income derived             and ‘‘other contracting state’’ mean        of America avails itself of this oppor-
   from the international operation of            the Sovereign Democratic Republic           tunity to renew to the Ministry of
   ships or aircraft by individuals who           of Fiji or the United States of             Foreign Affairs of the Government of
   are residents of Fiji (other than              America, the governments of which           the Republic of Fiji the assurances of
   United States citizens) and corpora-           have concluded this agreement.              its highest consideration.’’
   tions which are incorporated in Fiji.          (B) Gross income includes all in-           The Ministry has the further honour
      The Government of the Republic of           come derived from international          to confirm that the Government of the
   Fiji agrees to exempt from tax gross           operation of ships or aircraft, in-      Republic of Fiji accepts that the Embas-
   income derived from the international          cluding:                                 sy’s above-quoted Note and this Note in
   operation of ships or aircraft by indi-           (I) Income from the rental on a       reply from the Ministry shall constitute
   viduals who are residents of the                  full (time or voyage) basis of        an agreement between the two govern-
   United States of America (other than              ships or aircraft used in interna-    ments to exempt from income tax on a
   Fiji citizens) and corporations which             tional transport;                     reciprocal basis, income derived by resi-
   are incorporated in the United States             (II) Income from the rental on a      dents of the other country from the
   of America.                                       bareboat basis of ships or aircraft   international operation of ships and air-
      In the case of a Fiji corporation,             used in international transport;      craft.
   the exemption shall apply only if the             (III) Income from the rental of          The Ministry of Foreign Affairs of the
   corporation meets one of the follow-              containers and related equipment      Government of the Republic of Fiji
   ing conditions:                                   used in international transport       avails itself of this opportunity to renew
      (I) The corporation’s stock is pri-            that is incidental to income from     to the Embassy of the United States of
      marily and regularly traded on an              the international operation of        America the assurances of its highest
      established securities market in Fiji,         ships and aircraft; and               consideration.