U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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99–112

SENATE ! 104TH CONGRESS

1st Session

TREATY DOC.

1995

104–11

F

EXCHANGE OF NOTES RELATING TO THE TAX

CONVENTION WITH UKRAINE

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

AN EXCHANGE OF NOTES DATED AT WASHINGTON MAY 26 AND

JUNE 6, 1995, RELATING TO THE CONVENTION (SEE TREATY

DOC. 103–30) BETWEEN THE GOVERNMENT OF THE UNITED

STATES OF AMERICA AND THE GOVERNMENT OF UKRAINE FOR

THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION

OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND

CAPITAL, TOGETHER WITH A RELATED PROTOCOL, SIGNED AT

WASHINGTON ON MARCH 4, 1994

JUNE 30, 1995.—Treaty was read the first time and, together with the

accompanying papers, referred to the Committee on Foreign Relations

and ordered to be printed for the use of the Senate

(III)

LETTER OF TRANSMITTAL

THE WHITE HOUSE, June 28, 1995.

To the Senate of the United States:

I transmit herewith an exchange of notes dated at Washington

May 26 and June 6, 1995, for Senate advice and consent to ratification in connection with the Senate’s consideration of the Convention Between the Government of the United States of America and

the Government of Ukraine for the Avoidance of Double Taxation

and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, together with a related Protocol, signed at Washington on March 4, 1994 (‘‘the Taxation Convention’’). Also transmitted for the information of the Senate is the report of the Department of State with respect to the exchange of notes.

This exchange of notes addresses the interaction between the

Taxation Convention and other treaties that have tax provisions,

including in particular the General Agreement on Trade in Services

(GATS), annexed to the Agreement Establishing the World Trade

Organization, done at Marrakesh April 15, 1995.

I recommend that the Senate give favorable consideration to this

exchange of notes and give its advice and consent to ratification in

connection with the Taxation Convention.

WILLIAM J. CLINTON.

(V)

LETTER OF SUBMITTAL

DEPARTMENT OF STATE,

Washington, June 10, 1995.

The PRESIDENT, The White House.

THE PRESIDENT: I have the honor to submit to you an exchange

of notes, dated at Washington May 26 and June 6, 1995, with a

view to transmission of these notes to the Senate for advice and

consent to ratification in connection with the Senate’s consideration

of the Convention between the Government of the United States of

America and the Government of Ukraine for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to

Taxes on Income and Capital, together with a related Protocol,

signed at Washington on March 4, 1994 (the ‘‘Taxation Convention’’). This exchange of notes addresses the interaction between

the Taxation Convention and other treaties and agreements that

have provisions affecting taxes.

The United States is a party to the General Agreement on Trade in Services (GATS’’) annexed to the Agreement Establishing the

World Trade Organization, done at Marrakesh April 15, 1994.

GATS entered into force on January 1, 1995. Although the United

States is a party to GATS, the Government of Ukraine is not yet

a party. The exchange of notes ensures first that, if Ukraine accedes to the GATS and GATS obligations become applicable between the United States and Ukraine, the dispute resolution mechanisms of the Taxation Convention would govern national treatment disputes regarding taxation measures. The exchange of notes

further provides that the non-discrimination provisions of the Taxation Convention, rather than the national or most-favored-nation

treatment obligations of any other agreement (except for the General Agreement on Tariffs and Trade, if it applies between the

United States and Ukraine, and the Agreement on Trade Relations

Between the United States and Ukraine, signed on May 6, 1992)

will apply to taxation measures except those outside the scope of

the Taxation Convention.

Provisions similar to those in this exchange of notes are included

in the taxation conventions between the United States and Portugal, Sweden, and France, which have been transmitted to the

Senate.
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The Department of Treasury and the Department of State cooperated in the negotiation of the Convention and the most recent

exchange of notes. The notes have the full approval of both Departments.

Respectfully submitted,

PETER TARNOFF.
(VII)

DEPARTMENT OF STATE,

Washington, May 26, 1995.

His Excellency YURIY SHCHERBAK,

Ambassador of Ukraine.

EXCELLENCY: I have the honor to refer to the Convention between the Government of the United States of America and the

Government of the United States of America and the Government

of Ukraine for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, together with a related Protocol, signed at Washington on

March 4, 1994 (‘‘Taxation Convention’’) and the General Agreement

on Trade in Services (‘‘GATS’’).

The Government of the United States is a Party to the GATS,

annexed to the Agreement Establishing the World Trade Organization, done at Marrakesh April 15, 1994. The Government of

Ukraine is not yet a party to the GATS. The United States and

Ukraine have, however, considered the relationship between the

Taxation Convention and the GATS in the event that the GATS applies between them, particularly with regard to the Consultation

provision in Article XXII of the GATS and the Most-Favored-Nation

and National Treatment provisions in Articles II and XVII of the

GATS. In addition, the United States and Ukraine have considered

the relationship between the Taxation Convention and other agreements that apply between them and that have provisions concerning national treatment or most-favored-nation treatment.

To address these issues, I have the honor to propose that:

(1) notwithstanding Article XXII and footnote II of the

GATS, in the event that the GATS applies between the United

States and Ukraine, a dispute concerning whether a measure

is within the scope of the Taxation convention shall be considered only pursuant to Article 26 (Mutual Agreement Procedure) of the Taxation Convention by the competent authorities

of the United States and Ukraine as defined in subparagraph

1(j) of Article 3 (General Definitions); and

(2) unless the competent authorities determine that a taxation measure is not within the scope of the Taxation Convention, national treatment or most-favored-nation obligations

under any other agreement (including GATS in the event that

it applies between the United States and Ukraine) shall not

apply to a taxation measure, except for such national treatment or most-favored-nation obligations as may apply to trade

in goods under the Agreement on Trade Relations between the

United States and Ukraine, signed on May 6, 1992, and the

General Agreement on Tariffs and Trade if it applies between

the United States and Ukraine.

If this proposal is acceptable to the Government of Ukraine, I

have the further honor to propose that this note, and your Govern-
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ment’s note in reply, shall constitute an agreement which shall

enter into force on the date the Taxation Convention enters into

force.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State:

ALAN LARSON.
(1)
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