The Fiscal Committee has been informed that a gift of 90,000 dollars has been offered to the League of Nations by the Rockefeller Foundation to enable the League to carry on its work relating to double taxation. The Committee unanimously desires to add its thanks to those already expressed by the Council to the Rockefeller Foundation for its generous action.

The members of the Committee also express their particular gratitude to their distinguished colleague, Professor Adams, who, in taking the initiative to which this most generous donation is due, has given fresh proof of his devotion to the work undertaken by the Fiscal Committee in the matter of double taxation.

The Fiscal Committee, having been invited by the Secretariat to express its opinion as to the kind of work it would be desirable to undertake in order to make the best use of the funds placed at the League's disposal by the Rockefeller Foundation, makes the following recommendations:

  • 1. In order to enable the Fiscal Committee to pursue the studies it has undertaken in the vast field of double taxation, the Committee should be provided with a staff of specialists who would be recruited and directed by the League Secretariat and who would work on lines laid down by the Fiscal Committee and in contact with its members.
  • 2. This staff would, primarily, carry out research work in regard to the methods of allocating or apportioning profits made or distributed by undertakings operating in two or more countries.
  • For that purpose the following subjects should be examined in detail:
  • (a) The laws in force in the different countries; regulations, decrees, orders and decisions; administrative practice and procedure; working principles and methods of accounting; their effect upon international double taxation;
  • (b) Methods—more particularly accounting methods—of ascertaining taxable profits which could be adopted by the fiscal administrations of the various countries and which would at the same time be equitable and reasonable from the point of view of the undertakings taxed, and would as far as possible prevent international double taxation, more particularly:
  • (i) When the taxable profits are computed on the basis of separate accounts;
  • (ii) When empirical methods are employed to obtain an approximate estimate of such profits;
  • (iii) When a system of fractional apportionment is employed.

  ― 8[4210] ―
  • 3. The staff should undertake any other studies relating to double taxation which might be required of it by the Secretary General of the League of Nations in consultation with the Fiscal Committee.
  • 4. The staff should further keep up to date and render accessible so far as possible the information it has collected.

The Fiscal Committee, being of opinion that the Rockefeller grant should be used primarily for the study of the question of the apportionment of profits, requested the Sub-Committee of five members appointed to prepare discussion of the problems, namely, M. BLAU, M. BORDUGE, Professor DORN, Professor FLORÈS DE LÉMUS and Sir Percy THOMPSON, to be good enough to give the Secretary-General of the League of Nations, should he so request, an opinion on any questions relating to the use of this gift.