Economic and financial section > Double taxation and tax evasion

II
Since 1906, a law in Belgium 16 has provided for the reduction of the rate of taxation (this
may amount to three-quarters) on profits earned abroad. The law of October 29th, iqic),
concerning taxes on income allows the deduction from taxable income of that part which ha;-
already been taxed under another head and the deduction from the taxation leviable of the tax
already paid on part of this income. Finally, the super-tax is not as a rule leviable on foreigners
who have not been resident in the country for at least six months. As regards succession duties,
the law of August 10th, 1923, authorises the deduction from the duties leviable in Belgium
of the death duty on transference (droit de imitation par dices) levied abroad on immovable
property situated abroad and fonning part of the estate of a person resident in the Kingdom.
In the Netherlands l7, the tax chargeable on the total income, including income derived from
abroad, is first calculated, and then the tax which would be due on the latter category if it were
taken alone. This second sum is then deducted from the first. The actual rate of taxation
abroad is not taken into consideration.
In Switzerland, the legislation of the Canton of Zurich provides that income earned in a
business situated abroad shall only be taxable to the extent of one-third. The bederal law
concerning the w^ar tax contains a similar provision. The cantonal laws of Basle- Town and Geneva
also grant exemption to income derived from businesses situated abroad.
In the United States18, taxes paid abroad by a United States citizen on income originating
abroad is deducted from the tax due on total income. But a maximum is fixed for this deduc¬
tion. This maximum is determined by calculating the tax on the portion of the income origi¬
nating abroad (at the American rate applicable to the taxpayer’s total income).
The system instituted between Great Britain and the Dominions is, as regards its form,
something midway between a national lawr and a true international treaty. The economic,
financial and political ties between the various parts of the British Empire have not prevented
the evils of double taxation, which have formed the subject of numerous reports and investiga¬
tions, but they have rendered the conclusion of arrangements easier. These agreements are
set out in a note by Sir Basil Blackett, member of the Financial Committee19. In the case of
income taxed both in the United Kingdom and in a Dominion, a deduction at the Dominion rate
is made from the rate charged in the United Kingdom. A maximum is fixed for this deduction
(namely, one-half the rate of taxation in the United Kingdom), and it is the Dominion concerned
which has to grant the necessary deduction if the total relief is to be equal to the lower of the
twro rates of taxation.
We now come to actual international agreements or treaties. These are already fairly
numerous. They have been collected and their contents circulated by the Secretariat.
Before the war, the Austro-Hungarian Empire concluded vdth a number of States forming
part of the German Empire certain conventions which are still in force between Prussia, Saxony,
etc., and the Succession States. The treaty with Prussia, which dates from 1899, has been issued
as a special document20, as have two treaties concluded by the Canton of Basle-Town with Prus¬
sia 21 and the Grand-Duchy of Baden 22
After the war, the new conditions resulting from the dismemberment of a number of European
empires increased the difficulties arising out of the rival claims of different States. One aftei
the other, treaties w^ere concluded between certain of the Austro-Hungarian Succession States
among themselves or between them and neighbouring States. We may mention those concluded
10 Memorandum F. .47 by M. Clavier.
17 Memorandum F. 35 by M. Sinninghe Damste.
18 See Memorandum F. 138 by the Secretariat.
19 .See Document F.. F. S. — A. 16 (printed booklet).
20 Document F. 15 (3).
21 Document F. 15 (2).
22 Document F. 15 (1),