Ottawa Agreement Income Tax

This understanding can be modified by a subsequent informal agreement if it seems beneficial. An agreement under Article 19, second sentence, of the Ottawa Agreement was reached between the United States and the Council and signed on September 29, 1951 in London, 5 U.S.T. 1098, T.I.A.S. 2992 (London Agreement). The London Agreement excluded the direct engagement of US citizens by NATO for positions within the international staff. The United States signed the Ottawa Agreement following the pre-conclusion of the London Agreement. This report from the Interdepartmental Working Group was presented to the Senate Foreign Relations Committee, along with the Ottawa Agreement and two other NATO Status Agreements for the Committee`s Review of Ratification. The other two agreements implemented Article 7, paragraph 2, of the Protocol on the Status of the International Military Headquarters established under the North Atlantic Treaty, 5 U.S.T. 870, T.I.A.S. 2978, see note 3 above.

These agreements were: US-NATO agreement on the employment by international military staffs of American nationals, concluded on February 25, 1953, T.I.A.S. 2978, and NATO agreement on the employment of American nationals by international military organizations, concluded on September 18, 1963. The adoption of the respondent`s interpretation of the agreements would appear to take into account concerns such as those of Great Britain, as this would allow the United States to tax its nationals, who were direct NATO jobs. The London agreement provides that the United States, not NATO, hire American citizens to hold NATO positions and pay their salaries. The London agreement remains silent on the tax consequences of its recruitment procedures. On the contrary, these tax consequences are controlled by Article 19. Article 19, third paragraph, provides that a Member State can tax the sums it pays under a secondment contract, but, in accordance with the clear provisions of Article 19, salaries paid by NATO are not taxed unless a secondment agreement has been amended or denounced. The parties have established that the London Agreement was not amended or denounced before or during the years at issue (unless it was later amended by an amendment to Section 911).