KUWAIT HAS ONE SUGGESTED CHANGE TO RECIPROCAL

UNCLAS KUWAIT 000975 SIPDIS STATE FOR NEA/ARP, EEB/TRA/OTP E.O. 12958: N/A TAGS: EAIR ECON EFIN KTIA KU SUBJECT: KUWAIT HAS ONE SUGGESTED CHANGE TO RECIPROCAL AVIATION TAX EXEMPTION AGREEMENT REF: A. KUWAIT 245 ¶B. STATE 13098 ¶1. This is an action request. Please see Para 5. ¶2. (U) On October 5, Post received a formal diplomatic note stating that Kuwait's Ministry of Finance accepted all USG proposed amendments to a 2007 GoK draft Memorandum of Understanding on Reciprocal Tax Exemption for the Aviation Sector. The Ministry of Finance proposed adding one category of gross income derived from the international operation of aircraft listed in Article 1 of the MOU: "(VI) Any income derived from full fair passenger ticket or discounted ticket sales and freight revenue." Post will forward diplomatic note and informal translation to the Department. ¶3. (U) Begin informal translation: Complimentary opening. The Ministry would like to inform the Embassy that it has received an official letter from the Kuwaiti competent authority (Ministry of Finance) that indicates its approval of the proposed amendments offered by the American side, and would like to add the following statement to Article 1 of the "Agreement on Reciprocal Exemption from taxation on income derived from the International Operation of Aircraft" established between the governments of the State of Kuwait and the United States of America: "(VI) Any income derived from full fair passenger ticket or discounted ticket sales, and freight revenue." The Ministry requests the Embassy's assistance in referring this amendment to the American competent authorities and provide a response so that the necessary action can be taken. Complimentary closing. End informal translation. ¶4. (U) On September 28, Omar Welayti, Head of the Ministry's tax treaties section, contacted Econcouns to say that the agreement had been sent to the MFA for transmittal and to ask what the next steps were. (Note: the GoK had previously formally confirmed that Decree No. 108/1976 and Ministerial Resolution No. 7/1982 were still valid and covered reciprocal tax exemptions for foreign airlines. End note.) ¶5. (U) Action request: Post requests Department review the GoK proposed amendment to the MOU and advise as to whether it is acceptable. Should the proposed amendment prove acceptable, Post further requests Department's guidance on next steps for signing the MOU. End Action Request. ********************************************* ********* For more reporting from Embassy Kuwait, visit: visit Kuwait's Classified Website at: http://www.intelink.sgov.gov/wiki/Portal:Kuwa it ********************************************* ********* WILLIAMS