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12987 Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization - Tax Riembursement Agreement


   
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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 12987

 

 

TAXATION

Reimbursement

 

 


Agreement Between the
UNITED STATES OF AMERICA
and the PREPARATORY COMMISSION
FOR THE COMPREHENSIVE NUCLEAR-
TEST-BAN TREATY ORGANIZATION


Signed at Washington October 21, 1998

with

Annex

 

 


 

NOTE BY THE DEPARTMENT OF STATE

Pursuant to Public Law 89—497, approved July 8, 1966
(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued
under the authority of the Secretary of State shall be competent
evidence . . . of the treaties, international agreements other than
treaties, and proclamations by the President of such treaties and
international agreements other than treaties, as the case may be,
therein contained, in all the courts of law and equity and of maritime
jurisdiction, and in all the tribunals and public offices of the
United States, and of the several States, without any further proof
or authentication thereof.”


PREPARATORY COMMISSION FOR THE
COMPREHENSIVE NUCLEAR-TEST-BAN
TREATY ORGANIZATION

Taxation: Reimbursement

Agreement signed at Washington October 21, 1998;
Entered into force October 21, 1998.
With annex.
TAX REIMBURSEMENT AGREEMENT BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND
THE PREPARATORY COMMISSION FOR THE
COMPREHENSIVE NUCLEAR-TEST-BAN TREATY ORGANIZATION
This Agreement is made between the Government of the United
States of America (hereinafter "United States") and the
Preparatory Commission for the Comprehensive Nuclear-Test-
Ban Treaty Organization (hereinafter "the Commission"),
(together "the Parties").
It is the intent of the United States to assume sole
responsibility pursuant to this Agreement for funding the
reimbursement of taxes to officials of the Commission who
are subject to United States tax law as United States
citizens or permanent resident aliens.
It is the intent of the Commission to place the
reimbursement of United States income tax to its officials
on a sound basis.
The Parties are desirous of concluding an agreement on
reimbursement to Commission officials of United States
Federal, state, and local income tax and self-employment tax
levied under United States law on the income they receive as
compensation for official services rendered to the
Commission (hereinafter "institutional income").
THE PARTIES AGREE AS FOLLOWS:
1. The Commission shall reimburse the Commission officials
paid from the regular budget who are liable for and pay the
United States Federal self-employment tax and United States
Federal, state, and local income taxes on their Commission
institutional income as defined in the annex to this
Agreement, the amount of those taxes, under the terms and
conditions set forth below. This Agreement does not cover
officials paid from voluntary funds. An advance payment
made by the Commission relating to the estimated tax
liability of a staff member during a current year will be
treated as reimbursement, provided that such payment is
effected by an instrument payable to the Internal Revenue
Service or counterpart body of the taxing state or local
government.
2. Subject to the availability of appropriated funds, the
United States shall reimburse the Commission for each
taxpayer an amount not to exceed the tax that would be due
if the specified categories of Commission income were the
taxpayer's only income, taking into account any special tax
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benefits available to United States taxpayers employed
abroad, as well as the deductions and personal exemptions
otherwise allowed.
3. Officials who seek reimbursement of taxes under this
Agreement shall claim all deductions, exemptions, or
exclusions to which they are entitled under applicable tax
legislation and regulations.
4. For purposes of United States Federal income tax,
deductions, exemptions, and adjustments to income shall be
apportioned on a pro rata basis between taxable Commission
institutional income and private income for the purposes of
calculating tax reimbursement, except where deductions and
exemptions relate to a specific category of income.
"Taxable Commission institutional income" means the amount
of Commission income subject to tax after the application of
the foreign earned income exclusion.
5. Both Parties shall take all possible measures to reduce
or eliminate the burden resulting from the cumulative effect
of tax reimbursements being treated as taxable income.
6. The Commission officials who seek reimbursement of taxes
under this Agreement are themselves responsible for
complying with any income tax laws applicable to them;
penalties, interest, or other charges resulting from
noncompliance with such laws shall not be reimbursed by the
Commission.
7. Each official claiming tax reimbursement shall determine
the status defined by United States tax law under which that
official files an income tax return, reimbursement being
made on the basis of the status under which taxes are in
fact being paid.
8. The Commission shall maintain separate accounting of the
tax reimbursements covered by this Agreement. The
Commission shall require each official receiving tax
reimbursement to authorize the Commission to obtain
confirmation from the United States Internal Revenue Service
and state and local government counterpart bodies, as
appropriate, of the tax liability of that official and the
payment of the tax due. The Commission shall require each
official to provide it with all the materials necessary to
verify that the amounts claimed under this Agreement from
the Commission are the same as the tax liability the
official reports and the tax payments the official in fact
makes.
9. Checks by the Commission for payment of estimated taxes
shall be made payable to the Internal Revenue Service, or
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counterpart body of the taxing state or local government,
and checks for reimbursement of taxes already paid by an
official shall be made payable to the official concerned.
10. Reimbursement of the United States Federal self-
employment taxes shall equal the difference between the
amount the official pays as a result of the official's
classification as a self-employed person, less any
applicable tax credit arising from the same qualification,
and the amount the official would have to pay in social
security (Old Age Survivors and Disability Insurance) taxes
and health insurance (Medicare) taxes were the official
classified as an employee.
11. The principles embodied in the present Agreement on
reimbursement of Federal taxes equally constitute the basis
for the reimbursement of state and local taxes.
12. The United States shall reimburse the Commission on
the basis of a certification that reimbursements have been
made by the Commission to United States citizens, or others
who are liable to pay United States income taxes. The
certification shall set forth the names and United States
social security numbers of the Commission officials
reimbursed, the total of Commission income against which the
United States tax has been paid (that is, institutional
income as defined in the annex), the amounts reimbursed to
the Commission officials, the tax year for which
reimbursement is made, and the year in which reimbursement
is made for each category of tax specified in Article 1 and
affirm that their salaries and benefits are paid from the
regular budget as required by Article 1. This information
shall be provided yearly to the United States before October
first of each year.
13. The United States shall reimburse the Commission at the
earliest possible date following receipt of the
certification specified in Article 12 a sum sufficient to
cover all tax reimbursements paid by the Commission with
respect to preceding tax years, in accordance with this
Agreement.
14. Subject to the availability of funds, the United States
and the Commission may agree to a reimbursement for such
reasonable and necessary expenses as the Commission may
incur in connection with the implementation of the
administrative procedures required to carry out the
provisions of this Agreement.
15. This Agreement shall apply with regard to tax
reimbursements for institutional income earned on or after
March 1, 1997.
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16. This Agreement shall enter into force upon signature by
the Parties and shall be terminated by either Party on
December 31 of the year following the year in which notice
is given in writing to the other Party or when the
Commission ceases to exist, whichever comes sooner. If this
Agreement terminates because the Commission ceases to exist,
the Parties shall determine what arrangements are
appropriate to permit reimbursement of Commission officials
as contemplated by this Agreement.
17. Should the United States conclude a tax reimbursement
agreement with any other international organization
substantially more favorable to that organization or its
officials than the present Agreement, the latter shall be
modified to extend to the Commission the benefit of the
former, subject to the agreement of the United States, which
shall not unreasonably be refused.
18. Any difficulties arising from the implementation of
this Agreement shall be resolved by consultations between
the Parties.
Done in duplicate, in the English language, in Washington,
this 21st day of October 1998.
FOR THE GOVERNMENT OF THE FOR THE PREPARATORY COMMISSION
UNITED STATES OF AMERICA: FOR THE COMPREHENSIVE NUCLEAR-
TEST-BAN TREATY ORGANIZATION:

Wolfgang Hoffmann

Executive Secretary
John D. Holum
Acting Under Secretary of
State for Arms Control and
International Security
Affairs/Director, U.S. Arms
Control and Disarmament Agency
Annex
A. Particulars of Institutional Income
"Institutional income," as used in this Tax Reimbursement
Agreement, includes only the following particulars of
compensation:
-- Basic salary
-- Post adjustment, including rental subsidies
-- Salary increases, including merit increments
-- Cost of living adjustments
-- Overtime
-- Night differential
-- Dependency allowance
-- Education grant and related travel
-- Home leave travel
-- Termination indemnity
-- Lump-sum payments for unused annual leave
-- Assignment grant
-- Removal expenses
-- Repatriation grant
-- Reimbursement of United States Federal, state, or local
income tax payments and United States self-employment
tax payments on institutional income.
Should the Commission approve the addition, modification, or
deletion of any elements of institutional income, this annex
may be modified by an exchange of letters, subject to the
agreement of the United States, which shall not be
unreasonably refused.



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