Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-03
INTERNATIONAL TAX.
REDUCTION SOUGHT
Americans Open Negotiations
to Reduce French Levy \
on U. S. Firms. n
BY the Associated Press.

By the Associated Press. M
PARIS, May 3.--New efforts TO rid
Franco-American business relations OF
some of their hindrances and drawbacks
were undertaken today when treasury
experts Of both countries began discuss
sion OF international taxation problems.
First on the agenda was the problem
of double taxation by France OF Ameri-
can companies operating here. This
taxation, involving huge amounts OF
money and great inconvenience to the
firms involved, has been the occasion
Of a number of protests by the Ameri-
can State Department and for q time
threatened to drive some American
companies out of the French field.
The conversations inaugurated today,
1t is hoped, will result in an accord
eliminating whatever inequalities may
exist in international taxation, reducing
the annoyanceS involved in the taxing
of nationals of one country by the other
and permitting Americans doing BUSH
ness in France to know in advance lust
what proportion of their turnover and
profits must go to the French govern
ment.
The American representatives, who
will act in conjunction with Ambassa-
dor Walter E. Edge, are George Alvord
OF the Treasury Department, Mitchell
Carol Of the Department of Commerce
and Prof. Thomas Sewall Adams Of
Yale University. internationally known
authority on taxation.
Millions at Stake.
Sums estimated at many millions Of
dollars are at stake in the negotiations
over double taxation. Under a recent
Interpretation of the old French law of
1878 foreign parent corporations having
branch businesses in France must not
only pay, like French Corporations, q
tax OF 10 per cent on profits and an 10
per cent dividend tax, but also an adj
d1tional tax of 18 per cent, which the
French fiscal authorities declare thew
have the right to assess en- the foreign
parent corporations.
Test suits have resulted in verdicts
against American corporations in the
lower courts, but the highest French
tribunal, the Court of Cessation, has
not yet ruled. The American Govern
menu mas not taken exception to the
first two impoSts, but holds the third
unlmpossaole under the international
law.
Troubles Of the American corpora.
lions have been increased by the diffi-
culties of bookkeeping. In one case.
where an American company was pre-.
sented with an assessment covering sew
eral precedent years, the natural pro-
test was met with the reply Bring your
books from America and perhaps a re-
vision can be made" AS the books for
the period covered would have filled q
couple of Atlantic liners, the offer was
declined and the company began 70
wind up its business here. It's depar-
ture has, however, been postponed by
the present negotiations.
Some Have Evaded Tax.
The French, on the other hand, de-
clare that many foreign corporations
have flagrantly evaded the French tax
alton laws and that imposition of the
present system is necessary to proper
taxation.
Other countries have shown much
interest in the present conversations,
Tor British, Swiss, Belgian and other
foreign companies have been presented
with equally large tax bills. Belgium,
1t is understood, has proposed arbitra-
ton, and the whole matter may be
brought up before the Permanent Court
of Arbitration at The Hague.
Switzerland has already negotiated
treaties "outlawing' double taxation
with Austria, and Germany is negotia-
ting for a similar treaty with Great
Britain and has made representations
to France. The English government,
similarly, has approached the French
government through the international
Chamber of Commerce. A special com.
mission of the League of Nations "a
studying the problem of an effort to pro.
cuce general taxation treaty.