FROM THE OFFICE OF PUBLIC AFFAIRS

September 14, 2004
JS-1914

Tax Information Exchange Agreement between United States and Aruba Enters Into Force

The Treasury Department announced today that the United States and Aruba have exchanged diplomatic notes bringing into force the tax information exchange agreement between the two countries that was signed in Washington, DC in 2003.  The U.S.-Aruba Tax Information Exchange Agreement entered into force on September 13, 2004, the date the exchange of diplomatic notes was completed.

The U.S.-Aruba Tax Information Exchange Agreement is consistent with the standards for an exchange of information agreement described in the Internal Revenue Code. The Code generally allows U.S. taxpayers to claim a tax deduction for expenses associated with a convention held in certain beneficiary countries with tax information exchange agreements with the United States to the same extent as a convention held in the United States.

As of September 13, 2004, Aruba is considered part of the "North American area" for purposes of determining whether U.S. taxpayers may deduct expenses incurred in attending conventions, business meetings and seminars in Aruba.  Convention expenses that are incurred by U.S. taxpayers for meetings in geographical areas considered part of the North American area and that otherwise are deductible as ordinary and necessary business expenses are allowed as deductions without regard to the additional limitations applicable to deductions for expenses associated with foreign conventions.  A list of geographical areas that currently are included in the North American area for purposes of these convention expense deduction rules is provided in Revenue Ruling 2003-109. This revenue procedure will be updated to take account the agreement with Aruba.

-30-