REPRESENTATIONS AGAINST THE APPLICATION OF A RESIDENCE OR SOJOURN TAX ON AMERICAN CITIZENS IN LATVIA 860p.512 Residence/1: Telegram The Minister in Latvia (Coleman) to the Secretary of State RIGA, September 7, 1928—3 p. m. 75. Does Department perceive any objection to Legation sending a note to the Latvian Foreign Office stating that Latvian nationals resident in the United States are not subject to the payment of a residence tax and requesting that American citizens in Latvia be accorded similar treatment? Under the present law, American citizens residing in Latvia are obliged to pay a residence tax of 2 lats a week or 60 lats per annum. British Government through a similar note has obtained a reduction of residence tax to 2 lats per annum on the basis of reciprocity. COLEMAN 860p.512 Residence/2: Telegram The Secretary of State to the Minister in Latvia (Coleman) [Paraphrase] WASHINGTON, September 15, 1928—2 p. m. 53. Your telegram No. 75, September 7, 3 p. m. You should ask that American citizens in Latvia receive tax treatment as favorable as that accorded to the citizens of any other foreign country. You should point out that by article 1 of the treaty of April 20, 1928,61 it is provided that the nationals of each country may "reside" in the other on the same terms as nationals of the country hereafter to be most favored. While the Department in principle does not consider that the Government of the United States is warranted in asking exemption from particular taxes of general application merely because the Government of the United States imposes no similar tax, the fact that the Government of Latvia has accorded exemption to British nationals on that ground justifies you in requesting the Government of Latvia to grant similar privileges to American citizens. KELLOGG "Treaty of friendship, commerce and consular rights, between the United States and Latvia, p. 208. 860p.512 Residence/4: Telegram The Chargé in Latvia (Sussdorff) to the Secretary of State [Paraphrase] RIGA, September 19, 1928-1 p. m. 80. Department's telegram No. 53, September 15, 2 p. m. This Legation has ascertained informally that the Government of Latvia regards the question of the sojourn tax as an administrative matter which does not fall under the most-favored-nation provision of article 1 of the treaty. The Government of Latvia has always arranged for the abolition or reduction of the sojourn tax on foreigners on the basis of reciprocity by means of an exchange of notes with the interested Governments. The Latvian Foreign Office considers that the Government of the United States is justified in requesting exemption of its nationals from sojourn taxes because such taxes are not imposed in the United States, and it proposes the procedure suggested in Legation's No. 75, September 7, 3 p. m. Instructions requested. SUSSDORFF 860p.512 Residence/5: Telegram The Secretary of State to the Chargé in Latvia (Sussdorff) [Paraphrase] WASHINGTON, September 25, 1928—11 a. m. 58. (1) You may address a note to the Latvian Foreign Office stating that you have been advised that the Government of Latvia follows the practice of granting exemption from residence tax with respect to the nationals of certain countries because these countries impose no such tax on the nationals of Latvia. (2) You should examine the provisions of the Latvian law and request the most favorable treatment authorized thereby. In doing so, however, you may refrain from making any claim under the treaty; but it would appear advisable in such case to state at least orally that in refraining from doing so it is not to be understood that you are admitting that the situation is not covered by the treaty, which question is fully reserved. KELLOGG 860p.512 Residence/ The Chargé in Latvia (Sussdorff) to the Secretary of State No. 5601 RIGA, October 3, 1928. SIR: I have the honor to refer to the Department's telegram No. 58, of September 25, 11 a. m., authorizing the Legation to address a Note to the Latvian Foreign Office concerning the desire of the United States Government to secure the exemption of American citizens from the residence tax imposed on foreigners in Latvia. As a result of further informal conversations with the Latvian Foreign Office, the Legation has decided to withhold the despatch of the Note in the form suggested by the Department until it has submitted to the Department further particulars concerning the practice and views of the Latvian Government with respect to the residence tax on foreigners. The first sentence of the draft suggested by the Department contains an inaccurate statement of fact, since, according to the Latvian Foreign Office, the Latvian Government does not follow the practice of granting nationals of foreign countries residing in Latvia exemption from the residence tax although it has made an agreement with Estonia whereby on the basis of reciprocity nationals of each country residing in the other are exempted from this tax. Latvia has so far made only one other agreement with respect to exempting citizens of foreign countries from the residence tax-namely, the agreement with Great Britain, to which the Legation referred in its telegram No. 75, of September 7, 3 p. m. The Latvian Foreign Office states that nationals of all foreign countries, except Estonia and Great Britain, residing in Latvia are paying the same residence tax as that now paid by American citizens. The Latvian Government considers agreements such as the two referred to above as being of a purely administrative nature and maintains that it is not bound by any treaty provision and that it is not under any other obligation to make such an agreement with any country. The Legation is of the opinion that the Latvian Foreign Office will adhere firmly to this point of view, . . . The Latvian Foreign Office states, however, that it is willing, by special agreement, to exempt citizens of certain countries, including the United States, from the Latvian residence tax, providing the Governments of those countries assure the Latvian Government by Note that Latvian citizens residing in their territory are exempt from such taxes. In order to avoid a protracted correspondence which may delay the relieving of American citizens from the burden of the Latvian residence tax, it is suggested that the Legation be authorized to submit a Note to the Latvian Foreign Office along lines similar to the British Note, a copy of which is transmitted herewith.62 I am enclosing a draft of a Note 2 which I believe will result in bringing about the desired action on the part of the Latvian Government and which will not, in my opinion, admit in any way that the situation is not fully covered by treaty. It would be appreciated if the Department would telegraph me whether it approves of my delivering this Note to the Latvian Government and at the same time making an oral statement that the failure of the United States Government to refer to the Treaty is not to be construed as an admission that the situation is not covered therein. I have [etc.] 860p.512 Residence/7: Telegram LOUIS SUSSDORFF, Jr. The Chargé in Latvia (Sussdorff) to the Secretary of State RIGA, November 21, 1928-4 p. m. 94. Would appreciate an immediate telegraphic reply to my urgent despatch No. 5601 of October 3rd, submitting proposal which would eliminate residence tax on American citizens in Latvia. Consulate reports that failure to settle the matter is causing serious inconvenience to American citizens here. SUSSDORFF 860p.512 Residence/8: Telegram The Secretary of State to the Chargé in Latvia (Sussdorff) WASHINGTON, November 21, 1928–6 p. m. 68. Your 94, November 21, 4 p. m. Telegraph whether tax in question is applied to Latvian nationals as well as foreign nationals. KELLOGG 860p.512 Residence/9: Telegram The Chargé in Latvia (Sussdorff) to the Secretary of State RIGA, November 22, 1928-10 a. m. [Received November 22-9: 10 a. m.] 95. Your 68, November 21, 6 p. m. Tax in question does not apply to Latvian nationals. 62 Not printed. SUSSDORFF 860p.512 Residence/10: Telegram The Secretary of State to the Chargé in Latvia (Sussdorff) WASHINGTON, November 27, 1928—4 p. m. 69. Your 95, November 22, 10 a. m. Request exemption from tax for American nationals under paragraph 2, Article 1, of the treaty concluded April 20, 1928, which accords national treatment in matters of internal charges or taxes. KELLOGG 860p.512 Residence/11: Telegram The Chargé in Latvia (Sussdorff) to the Secretary of State RIGA, November 30, 1928—11 a. m. [Received 12:53 p. m.] 98. Your 69, November 17 [27], 4 p. m. Latvian Foreign Office states sojourn tax on foreign nationals is not an internal charge or tax since Latvian nationals are not subject to it and that, therefore, paragraph 2 of article 1 does not apply. Foreign Office asserts that question of sojourn tax on foreigners is dealt with specifically in last paragraph of article 1. Foreign Office further states that Latvian sojourn tax on foreigners was enacted before United States-Latvian treaty of April 21 [20], 1928, entered into force. Request further instructions. SUSSDORFF |