Greece-USA: Tax Transport Agreement (1988)

Transportation Tax Agreement (1988)

This Treaty was signed on June 10, 1988 and entered into force on June 10, 1988.

Agreement Between the UNITED STATES OF AMERICA and GREECE

The Department of State to the Greek Embassy

The Department of State proposes to the Embassy of Greece that the Government of the United States of America and the Government of Greece conclude an agreement to exempt from income tax, on a reciprocal basis, income derived by residents of the other country from the international operation of ships and aircraft. The terms of the agreement are as follows:

The Government of the United States of America, in accordance with sections 872(b) and 883(a) of the Internal Revenue Code, agrees to exempt from tax gross income derived from the international operation of ships or aircraft by individuals who are residents of Greece (other than U.S. citizens) and corporations organized in Greece. This exemption is granted on the basis of equivalent exemption granted by Greece to citizens of the United States (who are not residents of Greece) and to corporations organized in the United States (which are not subject to tax by Greece on the basis of residence).

In the case of a Greek corporation, the exemption shall apply only if the corporation meets the ownership or public trading requirements of U.S. domestic law. In the case of a corporation incorporated in a third country which grants an equivalent exemption to U.S. citizens and corporations, section 883(c) of the Internal Revenue Code will not apply if more than 50 percent of the value of the stock of the corporation is owned by individuals who are residents of Greece.

Gross income includes all income derived from the international operation of ships or aircraft, including income from the rental of ships or aircraft on a full (time or voyage) basis and income from the rental of containers and related equipment which is incidental to the international operation of ships or aircraft. It also includes income from the rental on a bareboat basis of ships and aircraft used for international transport.

The Department of State considers that this note, together with the Embassy’s reply note confirming that the Government of Greece agrees to these terms, constitutes an agreement between the two Governments which shall enter into force on the date of the Embassy’s reply note and shall have effect with respect to taxable years beginning on or after January 1, 1987.

A resident or corporation of Greece which derives income from the international operation of ships or aircraft may choose to apply to such income either the provisions of the agreement or of the tax treaty between the United States and Greece signed on February 20, 1950.

Either Government may terminate this agreement by giving written notice of termination through diplomatic channels.

Department of State,
Washington,
June 10, 1988
The Greek Embassy to the Department of State

EMBASSY OF GREECE

WASHINGTON, D.C.
Ref. No. 1069.I/AS872

The Embassy of Greece presents its compliments to the Department of State and has the honor to acknowledge receipt of the Department’s note dated June 10, 1988 proposing the terms of a reciprocal exemption from income tax of income derived from the international operation of ships and aircraft.

The Government of Greece in accordance with its relevant legislation, agrees to exempt from income tax on a reciprocal basis gross income derived from the international operation of ships or aircraft by U.S. citizens (who are not residents of Greece) and corporations organized in the United States (other than corporations which are subject to tax by Greece on the basis of residence).

In the case of a U.S. corporation, the exemption shall apply only if the corporation meets the ownership or public trading requirements of Greece’s domestic law.

Gross income includes all income derived from the international operation of ships or aircraft, including income from the rental of ships or aircraft on a full (time or voyage) basis and income from the rental of containers and related equipment which is incidental to the international operation of ships or aircraft. It also includes income from rental on a bareboat basis of ships and aircraft used for international transport.

The Embassy is pleased to confirm that the Department of State’s note and this reply note constitute an agreement between the two Governments, which shall enter into force on today’s date and shall have effect with respect to taxable years beginning on or after January 1, 1987.

A resident or corporation of the United States which derives income from the international operation of ships or aircrafts may choose to apply to such income either the provisions of this agreement or of the tax treaty between the United States and Greece signed on February 20, 1950.

Either Government may terminate this agreement by giving written notice of termination through diplomatic channels.

The Embassy of Greece avails itself of this opportunity to renew to the Department of State the assurances of its highest consideration.

Washington, D.C.
June 10, 1988