United States-Cyprus Convention on Taxation and Fiscal Evasion Message to the Senate Transmitting the Convention.

To the Senate of the United States:

I transmit herewith, for the advice and consent of the Senate to ratification, the Convention between the Government of the United States of America and the Government of the Republic of Cyprus for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, together with a related exchange of notes, signed at Nicosia on March 26, 1980. For the information of the Senate, I also transmit the report of the Department of State with respect to the Convention.

The Convention generally follows the pattern of the United States model income tax convention, with certain departures to accommodate aspects of Cypriot law. In addition, special provisions included in the Convention assure that any concessions granted by the United States accrue to the benefit only of residents of Cyprus and not to third country residents.

The Convention also provides that the business profits of a resident of one country may be taxed by the other only if they are attributable to a permanent establishment in the other country. In addition, an individual who is a resident of one state may be taxed by the other state on income from personal services performed in the other if certain tests are met relating to the nature of his preference in that other country.

I recommend that the Senate give early and favorable consideration to the Convention and advice and consent to its ratification.

JIMMY CARTER

The White House,

May 16, 1980.