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13022 Organization for the Prohibition of Chemical Weapons - Tax Reimbursement Agreement


   
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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 13022

 

 

TAXATION

Reimbursement

 

 


Agreement Between the
UNITED STATES OF AMERICA
and the ORGANIZATION FOR THE
PROHIBITION OF CHEMICAL WEAPONS

 

Signed at The Hague February 25, 1999

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.”

 

ORGANIZATION FOR THE PROHIBITION
OF CHEMICAL WEAPONS

Taxation: Reimbursement

Agreement signed at The Hague February 25, 1999;
Entered into force February 25, 1999.
With annex.

TAX REIMBURSEMENT AGREEMENT BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND
THE ORGANIZATION FOR THE PROHIBITION OF CHEMICAL WEAPONS
This Agreement is made between the Government of the
United States of America (hereinafter "United States") and
the Organization for the Prohibition of Chemical Weapons
(hereinafter "OPCW"), together "the Parties."
In view of the fact that the Preparatory Commission for
the OPCW ceased to exist on May 16, 1997, the Parties
recognize the importance of concluding a further agreement
concerning tax reimbursement for OPCW staff members.
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 OPCW who are
subject to United States tax law as United States citizens
or permanent resident aliens.
It is the intent of OPCW 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 OPCW 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 OPCW
(hereinafter "institutional income").
THE PARTIES AGREE AS FOLLOWS:
1. The Parties agree that OPCW shall assume the rights
and responsibilities of the Commission under the Tax
Reimbursement Agreement between the Government of the
United States of America and the Preparatory Commission
for the Organization for the Prohibition of Chemical
Weapons ("the PrepCom Agreement").
2. OPCW shall reimburse OPCW 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 OPCW
institutional income as defined in the Annex to this
Agreement, the amount of those taxes, under the terms and
-2-
conditions set forth below. This Agreement does not cover
officials paid from voluntary funds. An advance payment
made by OPCW 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.
3. Subject to the availability of appropriated funds, the
United States shall reimburse OPCW for each taxpayer an
amount not to exceed the tax that would be due if the
specified categories of OPCW income were the taxpayer's
only income, taking into account any special tax benefits
available to United States taxpayers employed abroad, as
well as the deductions and personal exemptions otherwise
allowed.
4. 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.
5. For purposes of United States Federal income tax,
deductions, exemptions, and adjustments to income shall be
apportioned on a pro rata basis between taxable OPCW
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 OPCW institutional income" means the amount of
OPCW income subject to tax after the application of the
foreign earned income exclusion.
6. 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.
7. The OPCW 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
OPCW.
8. Each official claiming tax reimbursement shall
determine the status defined by United States tax law
under which that official files an income tax return,
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reimbursement being made on the basis of the status under
which taxes are in fact being paid.
9. OPCW shall maintain separate accounting of the tax
reimbursements covered by this Agreement. OPCW shall
require each official receiving tax reimbursement to
authorize OPCW 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.
OPCW shall require each official to provide it with all
the materials necessary to verify that the amounts claimed
under this Agreement from OPCW are the same as the tax
liability the official reports and the tax payments the
official in fact makes.
10. Checks by OPCW for payment of estimated taxes shall
be made payable to the Internal Revenue Service, or
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.
11. 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.
12. The principles embodied in the present Agreement on
reimbursement of Federal taxes equally constitute the
basis for the reimbursement of state and local taxes.
13. The United States shall reimburse OPCW on the basis
of a certification that reimbursements have been made by
OPCW 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 OPCW officials reimbursed, the
total of OPCW income against which the United States tax
has been paid (that is, institutional income as defined in
the Annex), the amounts reimbursed to OPCW officials, the
tax year for which reimbursement is made, and the year in
which reimbursement is made for each category of tax
-4-
specified in Article 2 and affirm that their salaries and
benefits are paid from the regular budget as required by
Article 2. This information shall be provided yearly to
the United States before October first of each year.
14. The United States shall deposit with OPCW at the
earliest possible date following receipt of the
certification specified in Article 13 a sum sufficient to
cover all tax reimbursements paid by OPCW with respect to
preceding tax years, in accordance with this Agreement.
15. Subject to the availability of funds, the United
States and OPCW may agree to a reimbursement for such
reasonable and necessary expenses as OPCW may incur in
connection with the implementation of the administrative
procedures required to carry out the provisions of this
Agreement.
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. 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 OPCW the benefit of the former, subject to the
agreement of the United States, which shall not
unreasonably be refused.
17. Any difficulties arising from the implementation of
this Agreement shall be resolved by consultations between
the Parties.
DONE in duplicate, in the English language, at The Hague,
this 25 day of February 1999.
FOR THE ORGANIZATION FOR THE GOVERNMENT OF THE
FOR THE PROHIBITION OF UNITED STATES OF AMERICA:
CHEMICAL WEAPONS:
Jose M. Bustani William J. Miller
Director General Permanent Representative
United States Permanent
Delegation to the OPCW
ANNEX
A. Particulars of Institutional Income
"Institutional income," as used in this Tax
Reimbursement Agreement, includes only the following
particulars of compensation:
Base salary
Post Adjustment, including rental subsidies
Salary increases, including merit increments
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.
Language allowance
Installation allowance
Non-resident allowance
Should OPCW 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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