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Agreement between the United States of America and the South Pacific Commission regarding the reimbursement of Income Taxes [1980] PITSE 11 (15 April 1980)

AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE SOUTH PACIFIC COMMISSION REGARDING THE REIMBURSEMENT OF INCOME TAXES

(Suva, 31 March 1980 - Noumea, 15 April 1980)

ENTRY INTO FORCE: 15 APRIL 1980

Effective: 1 January 1980 (retrospective)

The American Ambassador to the Secretary-General of the South Pacific Commission

Suva, 31 March 1980

The Honorable
M. Young Vivian
Secretary General
South Pacific Commission
P.O. Box D.5
Noumea, New Caledonia

Dear Mr. Secretary General:

I have been authorized to inform you that the United States Government can reimburse the South Pacific Commission for the sums utilized to reimburse personnel subject to payment of US income tax in order to insure that salaries of employees subject to US income tax are equivalent to those of staff members of SPC not subject to national taxes. To do this, I propose below a formal agreement establishing the procedure:

"The United States Government understands that the South Pacific Commission (SPC) will reimburse SPC staff members who are US citizens, or otherwise liable to pay US income taxes, for any US income taxes paid on their SPC income through a special suspense account. The US Government will be obligated to pay a tax equalization charge as part of its annual payment to the SPC to compensate this special suspense account. This charge will cover actual reimbursements made by the SPC to employees subject to US income taxes. This agreement does not cover employees paid from voluntary funds.

"This agreement may be terminated by either party. Termination shall take effect one year from the date that notice of termination is given."

Your concurrence in the above paragraph by letter will constitute the agreement between the United States Government and the South Pacific Commission formalizing the tax reimbursement procedure which will enter into force as of January 1, 1980.

Sincerely,

The Secretary-General of the South Pacific Commission to the American Ambassador

CABLE ADDRESS:

"SOUTHPACOM" NOUMEA

TELEPHONE: 26.20.00

TELEX: SOPACOM 139 NM

Adresse Telegraphique:
"Southpacom" Noumea

Telephone: 26.20.00

Telex: Sopacom 139 NM

South Pacific Commission
Post Box D 5
Noumea Cedex
New Caledonia
Commission Du Pacifique Sud
Boite Postale D 5
Noumea Cedex
Nouvelle-Caledonie

In reply, please quote SPC 1/2/3/2

PLEASE ADDRESS REPLY TO

THE SECRETARY-GENERAL

15 April 1980

The Honourable John P. Condon,
Ambassador for the United States,
Representative for the United States on the South Pacific Commission,
American Embassy,
P.O. Box 218,
SUVA, Fiji.

Dear Ambassador,

Thank you for your letter of 31 March proposing a formal agreement by which the United States Government will compensate the South Pacific Commission for the sums utilized to reimburse US income taxes incurred by its staff members paid under its regular budget. The proposed agreement is set out in the following text.

"The United States Government understands that the South Pacific Commission (SPC) will reimburse SPC staff members who are US citizens, or otherwise liable to pay US income taxes, for any US income taxes paid on their SPC income through a special suspense account. The US Government will be obligated to pay a tax equalization charge as part of its annual payment to the SPC to compensate this special suspense account. This charge will cover actual reimbursements made by the SPC to employees subject to US income taxes. This agreement does not cover SPC employees paid from voluntary funds.

This agreement may be terminated by either party. Termination shall take effect one year from the date that notice of termination is given".

I am happy to indicate my concurrence in the above text, on the understanding that it concerns all US income taxes levied on SPC income, and my acceptance that this exchange of letters constitutes the agreement between the United States Government and the South Pacific Commission formalizing the tax reimbursements procedure which will enter into force as of January 1, 1980.

Yours sincerely,

SIGNATORIES: