the agreement is applicable, the exempted taxes and duties, and the procedures which are required to obtain the tax relief authorized in such agreement.

4. Implementing Instructions.—Detailed implementing instructions relative to securing relief from the payment of foreign taxes and customs duties will be made the subject of a subsequent procurement circular. (AG 400.12 GLD-Heid Mil 7258]

BY COMMAND OF LIEUTENANT GENERAL BOLTE: OFFICIAL:

EDWARD T. WILLIAMS,
L. V. WARNER,

Major General, GS
Brigadier General, USA

Chief of Staff.
Adjutant General
DISTRIBUTION : Ea Army Procurement and Contracting Officer and Office, plus

3-CINCUSAFE (info)
3—COMNAVGER (info)

ANNEX A

US-ITALY Tax AGREEMENT

5 March 1952 EXCELLENCY:

Recently discussions have been held between the Governments of Italy and of the United States of America on the subject of Italian taxation insofar as it may affect certain United States expenditures for the common defense. These discussions have been conducted on the basis of the agreed principle that expenditures made in Italy by the United States for the common defense should be free of Italian taxation. In the course of these discussions certain understandings have been reached which I am pleased to communicate to you as the undertakings of the Italian Ministry of Finance:

1. Relief will be granted by Italy from Italian taxes in the manner specified in the annex to this note. Such tax relief will be applied to all United States purchases in Italy of armaments, equipment, materials, facilities, and services for the common defense effort. The cominon defense effort is understood to include existing foreign aid programs of the United States.

2. The taxes for which relief will be provided in the manner specified in the annex are the Italian: (a) transactions tax (imposta generals sulla entrata); (b) taxes on production (imposta de fabbricacione), including taxes on textiles (imposta sui filati delle fibre tessili) and petroleum products (imposta sugli olio minerali); (c) registration of contracts tax (L'imposta di registro); (d) taxes on construction and building materials (imposta di consummo: materiali per oostruzioni edilizie); and (e) import duties (imposta doganali).

3. Tax relief granted under this note and the annex thereto will be applied independently of possible limiting provisions contained in agreements concluded. earlier and will supplement the tax benefits currently enjoyed in Italy by the United States. The relief so accorded will apply to all payments of the United States of the character described herein which are made after the date of this note.

4. With respect to any taxes not specifically referred to in this note which might be found to be applicable to expenditures of the character described herein, the two governments will consult with a view to arriving at mutually satisfactory arrangements consistent with the spirit of this note.

5. Similarly, if other special situations should arise with respect to taxes of the types covered by paragraph 2, such situations will be discussed between the two governments in the spirit and within the terms of the understandings of the present note. If necessary, the Italian Government will examine the feasibility of sponsoring appropriate legislation.

6. The laws of Italy with regard to social-security and other contributions related to the employment of individuals are not affected by this agreement.

7. These undertakings enter immediately into effect. Accept, etc.

ANNEX It will be possible for Italy to provide the tax relief described in the note of the Ministry of Finance of March 5, 1952, within the framework of existing legislation and in the manner described below :

1. With respect to procurement of goods and services: Procurement by or on behalf of the United States of the character described in the note of March 1952, will have the benefit as exports of fiscal exemptions. (A) For IGE (Transactions Tax), the system applied will be:

(i) Exemption for such purchases from the payment of the normal tax applicable to the last sale.

(ii) Reimbursement of the IGE already included in the price of goods so procured. The Ministry of Finance will determine through ministerial debates the amount of the IGE actually included in such categories of goods and the amount which accordingly will be reimbursed on such purchases of the United States. This amount will be reimbursed by the Ministry of Finance to the vendor to the United States. Upon prior notification of the American authorities of categories as to which procurement may be made, the Italian administration will be able to state the amount of tax reimbursable in each such category, and will give this information to the American authorities even before publication of the decrees in the official gazette. The price paid by the United States to the vendor thus will be net of taxes.

(iii) Exemption of the tax on the furnishing of services under contracts for processing, repair, or rebuilding of “non-nationalized” items, for example,

items not formally incorporated into the Italian economy. (B) For production taxes, including those on textiles and petroleum products, the allowance or the reimbursement will be conceded or maintained by the Ministry of Finance according to current procedures.

(C) For the tax on registration of contracts, it is hereby made clear that no tax is applicable on contracts stipulated or concluded outside of Italy.

2. With respect to construction in Italy and the procurement of goods and services intended for the common defense in Italy, the Italian administration will assume the burden of taxes affecting expenditures of the United States. The taxes included in this article are the IGE, the registration of contracts tax and every other tax that can be applied to procurement or to construction or maintenance thereof, including such consumption tax on building materials as may possibly be chargeable.

(A) Where procurement or construction is carried out by the armed forces of the United States, or by means of a contract to which the United States or an agency thereof is a party, the Italian administration will sustain that part of the cost which can be attributed to the above-mentioned Italian taxes. Appropriate agreements will be made with the interested Italian ministry concerning the procedural aspects of this paragraph.

(B) Where procurement or construction is carried out by the Italian Government or by its armed forces, the United States will reimburse the Italian Government the agreed part of the total cost of the construction or procurement less an amount established by application to the United States contribution of the percentage of taxes in the total cost.

3. (A) Import duties are currently suspended with regard to the more important articles of a military nature imported into Italy. Such exemption will be extended, insofar as possible, to all articles imported by or on behalf of the United States having the character of defense or other aid within the framework of common defense.

(B) Customs duties for which exemption or allowance cannot be conceded under current regulations will be assumed as a burden by the Italian administration.

(C) For articles bought by the American Government for defense or other aid purposes, there will be applied the reimbursements of duties foreseen by existing customs law.

5 March 1952 His Excellency MINISTER EZIO VANONI,

Minister of Finance. EXCELLENCY: We have received your Note (with attached Annex) of March 5, 1952, which reads as follows:

“Recently discussions have been held between the Governments of Italy and of the United States of America on the subject of Italian taxation in so far as it may affect certain United States expenditures for the common defense. These discussions have been conducted on the basis of the agreed principle that expenditures made in Italy by the United States for the common defense should be free of Italian taxation. In the course of these discussions certain understandings have been reached, which I am pleased to communicate to you as the undertakings of the Italian Ministry of Finance :

6."1. Relief will be granted by Italy from Italian taxes in the manner specified in the Annex to this Note. Such tax relief will be applied to all United States purchases in Italy of armament, equipment, materials, facilities and services for the common defense effort. The common defense effort is understood to include existing foreign aid programs of the United States.

“2. The taxes for which relief will be provided in the manner specified in the Annex are the Italian: (a) Transactions tax (Imposta Generale sulla Entrata); (b) Taxes on production (Imposte di Fabbricazione), including taxes on tortilos' ( Imposta sui Filati delle Fibre Tessili) and petroleum products (Imposta sugli Olii Minerali) ; (c) Registration of contracts tax (L'Imposta di Registro);

(d) Taxes on construction and building materials (Imposte di Consumo : Materiali per Costruzioni Edilizie); and (e) Import duties (Imposte Doganali).

"3. The tax relief granted under this Note and the Annex thereto will be applied independently of possible limiting provisions contained in agreements concluded earlier and will supplement the tax benefits currently enjoyed in 'Italy by the United States. The relief so accorded will apply to all payments of the United States of the character described herein which are made after the date of this Note.

“4. With respect to any taxes not specifically referred to in this Note which might be found to be applicable to expenditures of the character described herein, the two Governments will consult with a view to arriving at mutually satisfactory arrangements consistent with the spirit of this Note.

“5. Similarly, if other special situations should arise with respect to taxes of the type covered by paragraph 2, such situations will be discussed between the two Governments in the spirit and within the terms of the understandings of the present Note. If necessary, the Italian Government will examine the feasibility of sponsoring appropriate legislation.

“6. The laws of Italy with regard to social security and other contributions related to the employment of individuals are not affected by this Agreement.

“7. These undertakings enter immediately into effect.”

“It will be possible for Italy to provide the tax relief described in Note of the Minister of Finance of March 5, 1952, within the framework of existing legislation and in the manner described below: 1. "1. With respect to procurement of goods and services: Procurement by or 'on behalf of the United States of the character described in the Note of March 5, '1952, will have the benefit as exports of fiscal exemptions. (a) For I. G. E., 'the system applied will be : (i) Exemption for such purchases from the payment of the normal tax applicable to the last sale; (ii) Reimbursement of the I. G. E., already included in the price of goods so procured. The Minister of Finance will determine, through Ministerial Decree, the amount of the I. G. E. actually 'included in such categories of goods and the amount which accordingly will be reimbursed on such purchases of the United States. This amount will be reimbursed by the Ministry of Finance to the vendor to the United States. Upon prior notification of the American authorities of categories as to which procure ment may be made the Italian Administration will be able to state the amount of tax reimbursable in each such category, and will give this information to the American authorities even before publication of the Decrees in the Official Gazette. The price paid by the United States to the vendor thus will be net of 'taxes. (iii) Exemption of the tax on the furnishing of services under contracts for processing, repair or rebuilding of non-nationalized items (that is, not formally incorporated into the Italian economy). (b) For production taxes including those on textiles and petroleum products the allowance or the reimbursement will be conceded or maintained by the Ministry of Finance according to current procedures. (c) For the tax on registration of contracts, it is hereby made clear that no tax is applicable on contracts stipulated or concluded outside of Italy.

"2. With respect to construction in Italy and the procurement of goods and services intended for the common defense in Italy: The Italian Administration will assume the burden of taxes affecting expenditures of the United States. The taxes included in this Article are the I. G. E., the registration of contracts 'tax and every other tax that can be applied to procurement or to construction or maintenance thereof, including such consumption tax on building materials as may possibly be chargeable. (a) Where procurement or construction is carried out by the Armed Forces of the United States, or by means of a contract to which the United States or agency thereof is a party, the Italian Administration will sustain that part of the cost which can be attributed to the above' mentioned Italian taxes. Appropriate agreements will be made with the interested Italian Ministry concerning the procedural aspects of this paragraph. (b) Where procurement or construction is carried out by the Italian Government or by its Armed Forces, the United States will reimburse the Italian Government the agreed part of the total cost of the construction or procurement less an amount established by application to the United States contribution of the per centage of taxes in the total cost.

*3. (a). Import duties are currently suspended with regard to the more jmportant articles of a military nature imported into Italy. Such exemption will be extended, in so far as possible, to all articles imported by or on behalf of the United States having the character of defense or other aid within the framework of common defense. (b) Customs duties for which exemption or allowance cannot be conceded under current regulations will be assumed as a burden by, the Italian Administration. (c) For articles bought by the American Govern. ment for defense or other aid purposes, there will be applied the reimbursements of duties foreseen by existing customs law."

We hereby express our agreement to the above Note and Annex.
Please accept Excellency assurances of my highest consideration.

JAMES CLEMENT DUNN,

American Ambassador. ROME, ITALY, March 5, 1952.

ANNEX A

US-NORWAY TAX AGREEMENT

Oslo, June 27, 1952 His Excellency CHARLES ULRICK BAY,

Ambassador of the United States of America, Oslo. Your EXCELLENCY: Within the context of the obligations assumed under the North Atlantic Treaty, discussions have recently been held between the Government of the United States of America and the Government of Norway on the subject of Norwegian taxation insofar as it may affect United States expenditures for the common defense. These discussions have culminated in certain understandings, which I am pleased to communicate to you as the undertakings of my Government:

1. Relief will be granted by Norway from Norwegian taxes, as indicated below. Such tax relief will be applied to all United States expenditures in Norway for equipment, materials, facilities, and service for the common defense effort, including such expenditures for any foreign aid program of the United States.

2. The relief to be extended will apply to Norwegian sales taxes and import duties or import taxes.

3. The procedure to be employed in extending such tax relief to expenditures by or on behalf of the United States will be:

(a) Exemption from sales taxes, including excise taxes on petroleum.

(b) Exemption from all customs duties and taxes on imported articles or imported components or materials. The normal drawback or refund of duty for reexported articles will apply whether such articles are retained in Norway or are in fact exported.

(c) The exemptions specified in (a) and (b) above will include taxes and customs duties, if any, in connection with sales to contractors with respect to contracts financed by the United States.

(d) With respect to infrastructure and any other program for which the Norwegian Government may act as procuring agency and receive reimbursement in whole or in part from the United States Government, procedures will be applied so as to ensure that the contribution of the United States is an amount which is net of Norwegian taxes as defined above. This procedure will be to reduce the amount of any charge to the Government of the United States by a sum which is computed by applying to the share of the United States, including taxes, the ratio which the aggregate amount of taxes bears to the total amount, including taxes, of the expenditures.

4. With respect to any Norwegian taxes not specifically referred to in this note which might be found to be applicable to United States expenditures in the categories embraced in this note, the two Governments will agree upon procedures with the purpose of making available exemption or relief therefrom consistent with the understandings contained herein.

5. The tax benefits or exemptions now in effect will be continued in effect without regard to limitations which may be contained in other agreements previously signed.

6. The relief to be accorded hereunder is applicable to all expenditures made after the date of this note. The laws of Norway with regard to social security and other contributions related to the employment of individuals are not affected by this agreement.

Upon receipt of a note from Your Excellency indicating that the foregoing provisions are acceptable to the Government of the United States of America, the Norwegian Government will consider that this note and your reply thereto constitute an agreement between the two Governments on this subject, which shall enter into force on the date of your note in reply. Accept, Your Excellency, the assurance of my highest consideration.

HALVARD LANGE,

No. 452.

Oslo, June 27, 1952 His Excellency Mr. HALVARD M. LANGE,

The Royal Norwegian Minister for Foreign Affairs, Oslo. EXCELLENCY: I have the honor to acknowledge the receipt of your note of to day's date, which reads as follows:

"Within the context of the obligations assumed under the North Atlantic Treaty, discussions have recently been held between the Government of the United States of America and the Government of Norway on the subject of Nor