ARTICLE 30 — U.S. Income Tax Treaty

Termination

This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after 5 years from the date on which the Convention enters into force provided that at least 6 months' prior notice of termination has been given through diplomatic channels. In such event, the Convention shall cease to have effect:

(a) in respect of tax withheld at the source, to amounts paid or credited on or after the first day of January next following the expiration of the 6-months' period;

(b) in respect of other taxes, to taxable periods beginning on or after the first day of January next following the expiration of the 6-months' period.

DONE at Kingston, Jamaica, in duplicate this 21st day of May, 1980.

FOR THE UNITED STATES OF AMERICA: FOR JAMAICA: (s) Loren Lawrence (s) Hugh Small

NOTES OF EXCHANGE

THE EMBASSY OF THE UNITED STATE. OF AMERICA

KINGSTON, MAY 21, 1980

No.141.

Excellency: I have the honor of commenting on the Convention between the Government of the United States of America and the Government of Jamaica for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income, signed today. The following understandings were reached between the two governments.

(1) In the process of negotiating this agreement, the delegation from Jamaica emphasized the necessity of including in the Convention additional provisions which will create incentives to promote the flow of investment to Jamaica.

The United States delegation is not able to accept such provisions at this time. However, I wish to assure you that my Government realizes the importance your Government attaches to the increase of investments in Jamaica. Should circumstances change, including any changes in the manner in which the United States imposes income tax upon the income of United States investments in Jamaica, our Government would be prepared to reopen the discussions in order to reflect in this Convention provisions which would minimize the conflicts between the United States tax system and the incentives proposed by the Government of Jamaica to foreign investors and which are consistent with the income tax policies of the United States, including tax Convention policies, with respect to other developing countries.

(2) In the course of discussions leading to the conclusion of the Convention signed today, the Jamaican delegation expressed its desire that Article 24 (Non-Discrimination) be drafted so as not to prevent Jamaica from imposing special taxes in pursuance of its economic development program, even if these taxes might otherwise violate the provisions of Article 24. The United States delegation explained that it could not agree to such a provision before having the opportunity to examine the specific aspects of such legislation. The United States delegation believes, furthermore, that it would be inappropriate to grant to the competent authorities the power to expand in this way the scope of the Convention by administrative action.

I would like to take this opportunity to assure you, however, that if at some time in the future Jamaica should enact legislation which would contravene the provisions of Article 24 of the Convention, the United States would be prepared to reopen discussions with the Government of Jamaica to determine whether it would be appropriate to except such legislation from the scope of Article 24.

(3) During discussions involving the Convention, representatives of the Government of Jamaica expressed their concern about whether certain amounts received by the Government of Jamaica from companies extracting and refining bauxite in Jamaica would qualify for the United States foreign tax credit. The Government of Jamaica expressed the belief that such amounts are in satisfaction of liability for the Jamaican company profits tax. The Government of Jamaica also expressed a willingness to consider a revision of its taxation of bauxite income to impose a tax “in lieu of” its company profits tax within the meaning of section 903 of the United States Internal Revenue Code. The Government of Jamaica desired assurance that such an “in lieu of” tax would be covered by the Convention.

The United States delegation discussed with the delegation of the Government of Jamaica the foreign tax credit requirements of sections 901 and 903 of the Internal Revenue Code. The United States delegation agreed that the language now included in paragraph 3 of Article 2 (Taxes Covered) of the Convention covers amounts paid “in lieu of” the company profits tax (or income tax) of Jamaica, if the Government of Jamaica decides to impose such a tax in the future. It is understood that such an “in lieu of” tax would have to meet the requirements of section 903 of the Internal Revenue Code of 1954 to be covered by the Convention.

Accept, Excellency, the renewed assurances of my highest consideration.

(s) Loren E. Lawrence

MINISTRY OF FINANCE AND PLANNING

30 NATIONAL HEROES CIRCLE P.O. BOX 512

KINGSTON,

JAMAICA NO 714/09

21 ^st May, 1980.

His Excellency Loren Lawrence, Ambassador of the United States of America .

Excellency:

I have the honor to acknowledge receipt of your note of May 21, 1980 which reads as follows:

“I have the honor of commenting on the Convention between the Government of the United States of America and the Government of Jamaica for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income, signed today. The following understandings were reached between the two governments.

States foreign tax credit. The Government of Jamaica expressed the belief that such amounts are in satisfaction of liability for the Jamaican company profits tax. The Government of Jamaica also expressed a willingness to consider a revision of its taxation of bauxite income to impose a tax “in lieu of” its company profits tax within the meaning of section 903 of the United States Internal Revenue Code. The Government of Jamaica desired assurance that such an “in lieu of” tax would be covered by the Convention.

Accept, Excellency, the renewed assurances of my highest consideration.”

I have the honor to confirm that the foregoing understandings are in accord with the view of the Jamaican Government and are approved by it.

Accept, Excellency, the renewed assurances of my highest consideration

(s) Hugh Small Minister of Finance & Planning .

PROTOCOL

PROTOCOL, WITH EXCHANGE OF NOTES, BETWEEN THE UNITED STATES

OF AMERICA AND JAMAICA AMENDING THE CONVENTION

OF MAY 21, 1980 SIGNED AT KINGSTON JULY 17, 1981

Protocol, with Exchange of Notes, Amending the Convention of May 21, 1980.

Signed at Kingston July 17, 1981; Transmitted by the President of the United States of America to the Senate September 8,1981

(Treaty Doc. No.97-17, 97th Cong., 1st Sess.); Reported Favorably by the Senate Committee on Foreign Relations December 9, 1981 (5. Ex.

Rept. No.97-40, 97th Cong., 1st Sess.); Advice and Consent to Ratification by the Senate, with a Reservation and an Understanding to

the Convention, December 16, 1981; Ratified by the President, Subject to Said Reservation and Understanding to the Convention,

December 22, 1981; Ratified by Jamaica December 29, 1981; Ratifications Exchanged at Kingston December 29, 1981;

Proclaimed by the President January 20, 1982;

Entered into Force December 29, 1981.

LETTER OF SUBMITTAL (PROTOCOL)

DEPARTMENT OF STATE, Washington, August 18, 1981.

The PRESIDENT, The White House .

THE PRESIDENT: I have the honor to submit to you, with a view to its transmission to the Senate for advice and consent to ratification, the Protocol amending the Convention between the Government of the United States of America and the Government of Jamaica for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, together with a related exchange of notes, signed at Kingston on July 17, 1981.

The Protocol was negotiated subsequent to Prime Minister Seaga's visit to Washington in January, 1981, and reflects the understandings reached between you and the Prime Minister.

A central feature of the Protocol, (Article IV), adds a new provision to Article 25 of the Convention (Non-Discrimination), to permit United States citizens to deduct expenses incurred while attending business conventions in Jamaica. Under the Protocol, expenses for any business convention held in Jamaica, if they are ordinary and necessary business expenses, will be deductible in the same way as if the convention were held in the United States.

Two provisions of the Protocol (Articles I and III) are designed to limit potential abuse of the Convention by denying treaty benefits in certain situations where benefits are not intended. Article I amends paragraph 3 of Article l of the Convention (Personal Scope), by providing that a former United States citizen who gives up his citizenship principally for tax avoidance purposes and resides in Jamaica will not be entitled to United States benefits under the Convention. Article III replaces Article 17 of the Convention and has as its purpose the denial of treaty benefits to residents of third countries who establish a corporation or other entity in one of the Contracting States for the principal purpose of obtaining treaty benefits from the other Contracting State. Although this was also the intent of Article 17 of the Convention as signed, the substitute language provided by Article III of the Protocol, makes the application of that provision more effective and less limited than the original.

The exchange of notes confirms understandings reached by the two Governments with respect to Article 17 of the Protocol, to ensure that its provisions are not used to impede bona fide investment in Jamaica by residents of third countries. In addition, the exchange of notes refers to past and present cooperation between the two countries on legal assistance in criminal matters, including fiscal crimes, and confirms their willingness to negotiate new treaties on extradition and mutual assistance on criminal matters.

The Protocol will enter into force upon the exchange of instruments of ratification and will have effect in accordance with the provisions of Article 28 of the Convention.

A technical memorandum explaining in detail the provisions of the Convention and the Protocol is being prepared by the Department of the Treasury and will be submitted to the Senate Committee on Foreign Relations.

The Department of the Treasury, with the cooperation of the Department of State, was primarily responsible for the negotiation of the Protocol. It has the approval of both Departments.

Respectfully submitted,

WILLIAM CLARK, Acting Secretary of State .

LETTER OF TRANSMITTAL (PROTOCOL)

THE WHITE HOUSE, September 8, 1981.

To the Senate of the United States:

I transmit herewith, for the advice and consent of the Senate to ratification, the Protocol amending the Convention between the Government of the United States of America and the Government of Jamaica for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, together with a related exchange of notes, signed at Kingston on July 17,1981. I also transmit the report of the Department of State with respect to the Protocol.

The Protocol was negotiated subsequent to Prime Minister Seaga's visit to this country in January, 1981. It strengthens the provisions of the Convention in order to limit potential abuse of the treaty in certain situations and to make more effective the means of denying treaty benefits to residents of third countries who establish a corporation in one Contracting State in order to obtain treaty benefits from the other Contracting State. The Protocol also permits United States citizens to deduct expenses incurred while attending business conventions in Jamaica.

I recommend that the Senate give early and favorable consideration to the Protocol and Convention and give its advice and consent to ratification.

RONALD REAGAN.

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

CONSIDERING THAT:

The Convention between the Government of the United States of America and the Government of Jamaica for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed at Kingston on May 21, 1980, together with a related exchange of notes, and the Protocol Amending the 1980 Convention, together with a related exchange of notes, was signed at Kingston on July 17, 1981, the texts of which are hereto annexed;

The Senate of the United States of America by its resolution of December 16, 1981, twothirds of the Senators present concurring therein, gave its advice and consent to ratification of the Convention, Amending Protocol and related exchanges of notes, subject to the following:

reservation that, notwithstanding the provisions of paragraph (5) of Article 13 of the Convention (which relates to the taxation of gains from the alienation of shares of a corporation or of an interest in a partnership, estate, or trust, the property of which consists, directly or indirectly, principally of real property situated in one of the countries), gain derived by a resident of a Contracting State from the alienation or other disposition of an interest in a corporation, or an interest in a partnership, trust, or estate, which has an interest in real property located in the other Contracting State, or the assets of which are considered under the domestic law of that other Contracting State to consist, in whole or in part, of real property, or an interest therein, in that other State, may be taxed by that other State to the extent provided for by its domestic law. In addition, gain derived by a corporation which is a resident of a Contracting State upon the distribution (including a distribution in liquidation or otherwise) of an interest in real property in the other Contracting State (as determined under the domestic law of the other Contracting State) may be taxed by that other Contracting State to the extent provided for by its domestic law
understanding that appropriate Congressional Committees and the General Accounting Office shall be afforded access to the information exchanged under this Convention where such access is necessary to carry out their oversight responsibilities, subject only to the limitations and procedures of the Internal Revenue Code.

The Convention, Amending Protocol and related exchanges of notes were ratified, subject to the aforesaid reservation and understanding by the President of the United States of America on December 22, 1981, in pursuance of the advice and consent of the Senate, and was ratified on the part of the Government of Jamaica;

The instruments of ratification of the Convention, Amending Protocol and related exchanges of notes were exchanged at Kingston on December 29, 1981, and accordingly the Convention and Amending Protocol entered into force on December 29, 1981, effective as specified in Article 29 of the Convention;

NOW, THEREFORE, I, Ronald Reagan, President of the United States of America, proclaim and make public the Convention, Amending Protocol and related exchanges of notes to the end that they be observed and fulfilled with good faith on and after December 29, 1981, by the United States of America and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof.

IN TESTIMONY WHEREOF, I have signed this proclamation and caused the Seal of the United States of America to be affixed

DONE at the city of Washington this twentieth day of January in the year of our Lord one thousand nine hundred eighty-two and of the Independence of the United States of America the two hundred sixth.

By the President:

RONALD REAGAN

ALEXANDER M. HAIG, JR.

Secretary of State

PROTOCOL, AMENDING THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF JAMAICA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL

EVASION WITH RESPECT TO TAXES ON INCOME,

SIGNED AT KINGSTON ON MAY 21, l980

The Government of the United States of America and the Government of Jamaica,

Desiring to conclude a Protocol to amend the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Kingston on May 21,1980,

Have agreed as follows: