Norway – USA Transport Tax Agreement (1990)

Transportation Tax Agreement (1990)

This Treaty was signed on May 24, 1990 and entered into force on May 24, 1990.

Agreement Between the UNITED STATES OF AMERICA and NORWAY

The Department of State to the Norwegian Embassy

The Department of State informs the Embassy of Norway that, in accordance with Sections 872(b) and 883(a) of the Internal Revenue Code, the U.S. Government agrees to exempt from tax gross income derived from the international operation of ships or aircraft by individuals who are residents of Norway (other than U.S. citizens) and corporations which are organized in Norway. This exemption is granted on the basis of equivalent exemptions granted by Norway to individual residents of the United States and to corporations organized in the United States.

In the case of a Norwegian corporation, the exemption shall apply only if the corporation meets the stock ownership or public trading requirements of U.S. law. For purposes of such ownership requirements, the Government of Norway shall be treated as an individual resident of Norway.

Gross income includes all income derived from the international operation of ships or aircraft, including:

(I) income from the rental on a full (time or voyage) basis of ships or aircraft used in international transport;

(II) income from the rental on a bareboat basis of ships or aircraft used in international transport;

(III) income from the rental of containers and related equipment used in international transport which is incidental to income from the international operation of ships or aircraft; and

(IV) gains from the sale or other alienation of ships or aircraft used in international transport by a person engaged in the international operation of ships or aircraft.

The exemption provided in this agreement shall also apply to gross income from participation in a pool, a joint business, or an international operating agency.

The Government of the United States of America considers that this note, together with the Government of Norway’s reply note confirming that the Government of Norway agrees to these terms, constitutes an agreement between the two governments. This agreement shall enter into force on the date of the Government of Norway’s note of reply and shall have effect with respect to taxable years beginning on or after January 1, 1987.

An individual of Norway or a Norwegian corporation which derives income from the international operation of ships or aircraft may choose to apply to such income either the provisions of this agreement or of the income tax treaty between the United States and Norway signed on December 3, 1971.

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

Department of State,
Washington, May 24, 1990
The Norwegian Embassy to the Department of State
ROYAL NORWEGIAN EMBASSY
WASHINGTON, D.C.

The Royal Norwegian Embassy presents its compliments to the Department of State and has the honour to refer to the note from the Government of the United States of America of May 24, 1990 which reads as follows:

[For text of the U.S. note, see pp. 2-3.]

Under Norwegian law, a resident of the United States is exempt from Norwegian tax on all income, capital and capital gains derived from ships or aircraft engaged in international traffic, including traffic to ports in Norway or between Norwegian ports. The Government of the Kingdom of Norway therefore agrees to the terms in the note, and that the two notes constitute an agreement between the two governments to have effect and be terminated as stated therein.

The Royal Norwegian Embassy takes this opportunity to renew to the Department of State the assurances of its highest consideration.

Washington, D.C. 24 May 1990
The Department of State
Washington, D.C.
No. 23/90