Exchange of Notes

EXCHANGE OF NOTES 

I

EMBASSY OF THE UNITED STATES OF AMERICA

Bridgetown, Barbados

December 31, 1984

The Honorable Louis R. Tull, M.P.,

Minister of Foreign Affairs and Attorney-General Barbados

Excellency:

I have the honor to refer to the Convention between the United States of America and Barbados for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed today. The following understandings were reached between the two Governments:

(1) In the process of negotiating this Convention, the delegation of Barbados emphasized the necessity of including in the Convention additional provisions which would create incentives to promote the flow of United States investment to Barbados.

The United States delegation is not able to accept such a provision at this time. I wish, however, to assure you that my Government realizes the importance your Government attaches to the increase of United States investment in Barbados. Should circumstances change, our Government would be prepared to reopen the discussions in order to reflect in this Convention provisions which would minimize the conflicts between the United States tax system and the incentives offered by the Government of Barbados to promote foreign investment in Barbados and which are consistent with the income tax policies of the United States, including tax convention policies, with respect to other developing countries.

(2) During the course of the negotiation of this Convention, the delegation of Barbados sought agreement to include in the Convention a provision which would treat as charitable contributions for tax purposes, gifts by a resident of one Contracting State to a charitable organization in the other.

The United States delegation cannot agree to such a provision at this time, I wish, however, to assure you that my Government appreciates the potential benefits of such a provision to the cultural and economic development of Barbados. If, in the future, United States policies in this regard should change, and the provision by the United States of such benefits by treaty to United States persons should become acceptable, the United States would be prepared to reopen discussions with a view to incorporating into the Convention such a provision.

I have the honor to propose to you that the present Note and your reply thereto constitute the agreement of our two Governments on these understandings.

Accept, Excellency, the assurances of my highest consideration.

Kenneth A. Kurze

Chargé d’Affaires a.i.

II

MINISTRY OF FOREIGN AFFAIRS.

MARINE HOUSE.

BARBADOS

December 31, 1984

Mr. Kenneth Kurze

Charge d’Affaires a.i.

Embassy of the United States of America

Canadian Imperial Bank of Commerce Building

Broad Street BRIDGETOWN

Sir,

I have the honour to refer to your Note of December 31, 1984 which reads as follows:

[see I]

The Government of Barbados agrees with the contents of your Note above, which together with this Note shall constitute an agreement between the Governments of Barbados and the United States of America in this matter.

Accept, Sir, the assurances of my highest consideration.

Louis R. Tull

Minister of Foreign Affairs.