Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-03-07
LEAGUES REPORT
ON TAXES ISSUED
Double Taxation and Eva
sion Questions Covered
{ in Long Survey.

BY the Associated Press.
GENEVA, March THE League OF
Nations last night made public
document for which all governments,
including that of the United States,
have been waiting with interest Tor
months. 1t was report on the
problem of double taxation and tax
evasion on which experts have been
working for years.
The report is regarded here as OF
the greatest value to governments
private enterprises and individuals
generally, because 1t not only pre-
sents a series of recommendations on
these complicated subjects, but In
view of the Importance of these
questions to the worlds economic
life, 1T suggests a further and wider
inquiry by a new body OF teehnlca
experts, including representatives OF
the United States and Germany.
These experts would prepare draft
conventions for a later general In
ternational conference.
Double Levy Assaulted.
Starting with the principle that
double taxation should be avoided be-
cause it is unjust and destroys in
itiative, the experts reported in favor
of a general rule that the personal
income tax should be levied only by
,he country of domicile. They admit,
however, certain exceptions. For ex-
ample. they recommend the conclusion
of bilateral conventions when, for
special reasons, a state other than
state OF domicile finds necessity for
imposing a general tax on income
arising from immovable property and
agricultural, industrial and CONNER
cial undertakings. The committee
recommends that rules adopted for a
general income tax should be ap-
piled to permanent taxes on the tax
payers total wealth or capital and to
death duties.
The experts generally recognize
that only the state in which the
source of income is situated has the
right to impose impersonal or sched-
ular taxes.
Industrial Tax Proposal.
In case an industrial or CONNER
cial enterprise is conducted in several
countries the committee suggests
that each of the contracting states
should tax that portion of net income
produced in its own territory.
Relative to shipping companies, the
committee admits exception by
which, subject to reciprocity, the tax
would be imposed only by the coun-
try in which the real center Of the
undertaking is situated.
AS regards transferable securities,
the committee considers States in
which the debtor-namely, the Office
paying the interests domiciled
should normally be entitled to levy
the schedullar tax. Nevertheless, the
committee recommends the conclusion
of agreements by which reimburse
ment or exemption from this tax
would be allowed in case securities,
deposits or current accounts of per-
sons domiciled abroad, or by which
the tax would be levied by the State
IN which the debtor is domiciled.
Domicfle Is Defined.
Emphasizing that any practical ap
plication of the above recommended
lions is dependent on agreement re-
garding the definition of domicile, the
committee explains that 1t considered
this question exclusive from the view
point of fiscal domicile. For the pur
poses of a general income tax the
committee deems that fiscal domicile
should mean the State in which the
individual taxpayer normally resides
or has a permanent home.
The committee recommends that
the most effective method of avoiding
tax evasion is for revenue authorities
TO supply other countries, on the basis
of reciprocity, in respect of persons
or companies domiciled in those
countries, such information as Is re-
CURED for tax assessment. 1t is sug
gested that international agreements
be concluded, together with sinulta-
neous education of public opinion
The committee emphasizes that sew
eral obstacles to fiscal evasion re-
forms exist, of which the most i'm
portant is "inviolability of banking
secrecy"
Collection Proposals.
Concerning difficulty in the collec-
ton of taxes owing to the residence
abroad of the taxpayer, the experts
recommended that the authorities of
given State act for other States in
the collection of taxes, and in meas
ures against tax evasion in the in
terest of all taxpayers, because the
countries by recovering a yield on
concealed revenue would be enabled
to reduce taxes or redeem their
loans"
Finally, besides urging further
study of the problems, the committee
suggests the creation of an interna-
tional body to handle the procedure
of Cancellation or arbitration in the
Interpretation of conventions con-
cluded by countries concerning dou-
Bile taxation and tax evasion.
Prof. Edwin r. A. Seligman, pro-
fessor of political economy and
finance at Columbia University, New
York, took an important part in the
leagues inquiry of which today's
report was the fruit. The report will
go to the council of the League of
Nations as a document proposing So
buttons of problems closely linked
with international trade and the
flow of international capital at time
when the economic reconstruction of
Europe Is recognized as of prime i'm
portance.