[Code of Federal Regulations]
[Title 26, Volume 18, Parts 500 to 599]
[Revised as of April 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR521.3]
[Page 137-138]
TITLE 26--INTERNAL REVENUE
CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
(Continued)
PART 521--DENMARK--Table of Contents
Subpart--Withholding of Tax
Sec. 521.3 Interest.
(a) General. Interest, whether on bonds, securities, notes,
debentures, or any other form of indebtedness (including interest on
obligations of the
[[Page 138]]
United States and on obligations of instrumentalities of the United
States), received on or after January 1, 1948, from sources within the
United States by (1) a nonresident alien (including a nonresident alien
individual, fiduciary, and partnership) who is a resident of Denmark, or
(2) a Danish corporation, is exempt from United States tax under the
provisions of Article VII of the convention if such alien or corporation
at no time during the taxable year in which such interest is so received
had a permanent establishment in the United States. Such interest is,
therefore, not subject to the withholding provisions of the Internal
Revenue Code.
(b) Exemption from withholding. (1) To obviate withholding at the
source in the case of coupon bond interest, the nonresident alien
resident in Denmark or the Danish corporation shall submit Form 1001-D,
in duplicate, to the paying agent with each presentation of interest
coupons. Such form shall be signed by the owner of the interest, trustee
or agent, and shall show the name and address of the obligor, and the
name and address of the owner of such interest and the amount of such
interest. Such form shall contain a statement that the owner is a
resident of Denmark or a Danish corporation and that such owner has no
permanent establishment in the United States.
(2) The exemption from United States tax contemplated by Article VII
of the convention, insofar as it concerns coupon bond interest, is an
exemption applicable only to the owner of such interest. The person
presenting such coupon or on whose behalf it is presented shall, for the
purpose of the exemption, be deemed to be the owner of the interest only
if he is, at the time the coupon is presented for payment, the owner of
the bond from which the coupon has been detached. If the person
presenting the coupon is not the owner of the bond, Form 1001, and not
Form 1001-D, shall be executed.
(3) The original and duplicate ownership certificates, Form 1001-D,
must be forwarded to the Commissioner with the quarterly return, Form
1012, as provided in existing regulations with respect to Form 1001. See
Sec. 29.143-7 of Regulations 111 (26 CFR 1949 ed. Supps. 29.143-7) [and
Sec. 39.143-7 of Regulations 118 (26 CFR, Rev. 1953, Parts 1-79, and
Supps.)]. Form 1001-D need not be listed on Form 1012.
(4) In the case of interest coupons presented in Denmark by a
nonresident alien who is not a resident of Denmark or by a foreign
corporation other than a Danish corporation, ownership certificates,
Form 1001, shall be filed as provided in existing regulations without
reference to the provisions of the convention. See Sec. 29.143-4 of
Regulations 111 (26 CFR 1949 ed. Supps. 29.143-4) [and Sec. 39.143-4 of
Regulations 118 (26 CFR, Rev. 1953, Parts 1-79, and Supps.)].
(5) To avoid withholding at the source in the case of interest other
than interest payable by means of coupons, the nonresident alien who is
a resident of Denmark, or the Danish corporation, shall file Form 1001A-
D, in duplicate, with the withholding agent in the United States. Such
form shall be signed by the owner of the income, trustee or agent, and
shall show the name and address of the obligor and the name and address
of the owner of such interest. Such form shall contain a statement that
the owner is a resident of Denmark or is a Danish corporation and that
the owner has no permanent establishment in the United States.
(6) Form 1001A-D must be filed for each three calendar year period
and the first such form filed by the taxpayer with any withholding agent
should be filed not later than 20 days preceding the date of the first
payment of income in such period. If the taxpayer files such form with
the withholding agent in the calendar year 1948 or in any subsequent
calendar year no additional Form 1001A-D need be filed prior to the end
of the two calendar years immediately following the calendar year in
which such form is so filed unless the Commissioner notifies the
withholding agent that an additional Form 1001A-D must be filed by the
taxpayer at any earlier date. The duplicate of Form 1001A-D should be
immediately forwarded by the withholding agent to the Commissioner of
Internal Revenue, Records Division, Washington 25, D.C.
[[Page 139]]