811.5123/2352
The Secretary of State to the Netherland Minister ( Van Haersma de With )
Sir: I refer to the Netherland Legation’s Aide-Mémoire No. 2115, dated July 1 [June 21], 1935, reporting that notices have been received by Netherland citizens and corporations to file returns for income received from transactions on stock exchanges in the United States since 1929 and proposing, therefore, that an agreement be entered into between the United States and the Netherlands with a view to preventing double taxation.
The Acting Secretary of the Treasury has now informed me that he approves in general of the reduction or elimination of double taxation of income by reciprocal treaty arrangements but that the Treasury [Page 491] Department cannot commit itself with regard to the merits of the plan proposed by the Netherland Legation as the suggested plan is not sufficiently detailed with regard to certain important problems relating to double or multiple taxation, such as the formula for allocating income to activities in the various taxing jurisdictions, the correlation and definition of basic terms in the revenue acts of the respective contracting parties, the maintenance of proper accounts by foreign businesses and other related problems.
Accept [etc.]