TREATIES AND OTHER INTERNATIONAL ACTS SERIES 14-312

________________________________________________________________________

DOUBLE TAXATION

Aircraft

Memorandum of Understanding

 Between the

UNITED STATES OF AMERICA

and KUWAIT

Signed at Kuwait March 28, 2011 
 NOTE BY THE DEPARTMENT OF STATE

 Pursuant to Public Law 89—497, approved July 8, 1966

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent

evidence . . . of the treaties, international agreements other than

treaties, and proclamations by the President of such treaties and

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime

jurisdiction, and in all the tribunals and public offices of the

United States, and of the several States, without any further proof

or authentication thereof.”
 KUWAIT

Double Taxation: Aircraft

 Memorandum of understanding signed at 

 Kuwait March 28, 2011;

 Entered into force March 12, 2014. 
MEMORANDUM OF UNDERSTANDING

BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA

AND

THE GOVERNMENT OF THE STATE OF KUWAIT

FOR THE RECIPROCAL TAX EXEMPTION ON INCOME DERIVED FROM THE

OPERATION OF AIRCRAFT

The Government of the State of Kuwait and the Government of the United States of

America (hereinafter referred to as the "Contracting Parties");

Desiring to strengthen the cooperation between them in the field of civil aviation towards

mutual coordination between them in respect of the income derived from the international

operation of aircraft between the State of Kuwait and the United States of America;

Have agreed as follows:
Article 1 

Taxes Covered

1. The Government of the United States of America, in accordance with sections 872 (b)

and 883 (a) of the U.S. Internal Revenue Code of 1986, agrees to exempt from U.S. federal

income tax gross income derived from the international operation of aircraft by individuals

who are residents of the State of Kuwait (other than U.S. citizens or residents) and

corporations that are organized in the State of Kuwait, in each case, that are engaged in the

international operation of aircraft. This exemption shall be granted on the basis of

equivalent exemptions granted by the State of Kuwait to individuals who are residents of

the United States (other than Kuwaiti citizens or residents) and to corporations organized in

the United States that are not subject to tax by the State of Kuwait on the basis of

residence. In the case of a Kuwaiti corporation, the exemption shall apply only if the

corporation meets the ownership or public trading requirements of U.S. law.

2. The Government of the State of Kuwait agrees to exempt from taxes imposed by the

State of Kuwait gross income derived from international operation of aircraft by

individuals who are residents of the United States (other than Kuwaiti citizens or residents)

and corporations that are organized in the United States, in each case, that are engaged in

the international operation of aircraft. This exemption shall be granted on the basis of

equivalent exemptions granted by the United States to individual residents of the State of

Kuwait (other than U.S. citizens or residents) and to corporations organized in the State of

Kuwait that are not subject to tax by the United States on the basis of residence.

Article 2 

Definitions 

Gross income derived from the international operation of aircraft includes:

a) Income from the rental on a full (time or voyage) basis of aircraft used in

international transport;

b) Income from the rental on a bareboat basis of aircraft used in international transport;

c) Income from the rental of containers and related equipment used in international

transport that is incidental to income from the international operation of aircraft;

d) Gains from the sale or other alienation of aircraft used in international transport;

e) Income derived by an individual or corporation otherwise engaged in the

international operation of aircraft from active participation in a pool, an alliance,

joint venture, international operating agency, or other venture, that is itself engaged

in the international operation of aircraft; and

0 Income from the carriage of passengers or cargo.
C

eborah K. Jones Khalifa M. Hamada

Ambass r of the Undersecretary for

United States of America Ministry of Finance

Article 3 

Entry into Force

The Contracting Parties shall notify each other in writing through diplomatic channels

when their respective legal procedures for entry into force of this Memorandum of

Understanding have been met. This Memorandum of Understanding shall enter into force

on the date of the later of the notifications required pursuant to this Article and shall have

effect with respect to taxable years beginning on or after January 1s` following such later

notification.

Article 4

Termination

This Memorandum of Understanding may be terminated by either Contracting Party

giving written notice of termination through diplomatic channels. Termination shall take

effect on the date of notification, unless the notification otherwise provides.

Done at Kuwait this 28th day of March 2011 corresponding to 23 rd of Rabi II 1432 H

in two originals in the Arabic and English languages, both texts being equally authentic.

FOR THE GOVERNMENT FOR THE GOVERNMENT OF

OF THE UNITED STATES THE STATE OF KUWAIT:

OF AMERICA: