690


FOREIGN RELATIONS, 1950, VOLUME I.


  ing a dynamic policy of economic expansion with the cooperation-of
  American private investments.


                           Editorial Note
    At the Ninth International Conference of American States heldi
  at Bogota in 1948, certain of the governments proposed that the
  Americanrepublics become parties to a multilateral treaty providing
  that income be taxed only by the govenment of the country in which
  the income was produced. The United States opposed this principle
  and obtained adoption, instead, of a resolution that each American
  state should, within the framework of its own institutions, seek to,
  liberalize its tax laws so as progressively to reduce or eliminate double
  taxation on income from foreign sources and to avoid unduly burden-
  some and discriminatory taxation without, however, creating inter-
  national means for tax avoidance. The states also agreed to seek con-
  clusion as soon as possible of agreements to prevent double taxation.
  A treaty with Colombia for the avoidance of double taxation was
  signed ad referendum at Bogota in November 1949, following detailed
  negotiations. It contained tax incentive provisions which would have
  eased United States income tax charges on the profits earned in
  Colombia by United States companies. Such preferences were op-
  posed, however, at high levels in the United States Department of the
  Treasury. As a result this treaty was not presented to Congress.
  Brazil requested a double. taxation treaty, -but it was known that.
  Brazil desired even more liberal tax*incentives than were provided'in
  the Colombian draft. The Brazilian concept involved-a virtual return
  to the pre-Bogota positions, in that United States capital invested
  in Brazil would be subject to income tax charges only at the source,
  of profit.
  In the two years or so following the Bogota Conference, discussions
  had been begun or were contemplated also with Argentina, Cuba,
  Ecuador, Mexico, Uruguay, and Venezuela, but after the Treasury
  Department withheld -approval of the Colombian treaty, the Depart-
  ment -of State felt ,that until that Department decided what type of
  concessions it would approve, no further- negotiations should be held
  with any other American republic. An impasse. developed, therefore,
  and the-program of concluding treaties for the avoidance of double
  taxation with underdeveloped countrieswent into-abeyance at the end
  of 1950. A limited agreement was -signed with Argentina, however on-
  July 20, which provided for the -avoidance of double taxation-on
  earnings derived from the operation of ships and aircraft (see footnote
2, page 689).