[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: 26CFR502.1]
[Page 5-7]
TITLE 26--INTERNAL REVENUE
CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
(Continued)
PART 502--GREECE--Table of Contents
Subpart--Withholding of Tax
Sec. 502.1 Introductory.
(a) The income tax convention and protocol between the United States
and Greece, signed February 20, 1950, and April 20, 1953, respectively,
and proclaimed by the President of the United States on January 15,
1954, referred to in this part as the convention, provides in part as
follows effective January 1, 1953:
Article I
(1) The taxes which are the subject of the present Convention are:
(a) In the case of the United States of America: the Federal income
tax, including surtaxes (hereinafter referred to as United States tax).
(b) In the case of the Kingdom of Greece: the income tax, including
the schedular or analytical tax, the complementary tax and the
professional or business tax (hereinafter referred to as Greek tax).
(2) The present Convention shall also apply to any other taxes of a
substantially similar character imposed by either Contracting State
subsequently to the date of signature of the present Convention.
Article II
(1) In the present Convention, unless the context otherwise
requires--
(a) The term ``United States'' means the United States of America
and when used in a geographical sense means the States, the Territories
of Alaska and Hawaii, and the District of Columbia.
(b) The term ``Greece'' means the territories of the Kingdom of
Greece.
(c) The term ``United States Corporation'' means a corporation,
association or other like entity created or organized in or under the
laws of the United States.
(d) The term ``Greek Corporation'' means a legal entity established
under the laws of Greece.
(e) The terms ``corporations of one Contracting State'' and
``corporation of the other Contracting State'' mean a United States
corporation or a Greek corporation, as the context requires.
(f) The term ``United States enterprise'' means an industrial or
commercial enterprise or undertaking carried on in the United States by
a citizen or resident of the United States or by a United States
corporation.
(g) The term ``Greek Enterprise'' means an industrial or commercial
enterprise or undertaking carried on in Greece by a subject or resident
of Greece or by a Greek corporation.
(h) The terms ``enterprise of one of the Contracting States'' and
``enterprise of the other Contracting State'' mean a United States
enterprise or a Greek enterprise, as the context requires.
(i) The term ``permanent establishment'', when used with respect to
an enterprise of one of the Contracting States, means a branch, factory
or other fixed place of business, but does not include an agency unless
that agent has, and habitually exercises, a general authority to
negotiate and conclude contracts on behalf of such enterprise or has a
stock of merchandise from which he regularly fills orders on behalf of
such enterprise. An enterprise of one of the Contracting States shall
not be deemed to have a permanent establishment in the other Contracting
State merely because it carries on business dealings in such other
Contracting State through a bona fide commission agent, broker or
custodian acting in the ordinary course of his business as such. The
fact that
[[Page 6]]
an enterprise of one of the Contracting States maintains in the other
Contracting State a fixed place of business exclusively for the purchase
of goods or merchandise shall not of itself constitute such fixed place
of business a permanent establishment of such enterprise. When a
corporation of one Contracting State has a subsidiary corporation which
is a corporation of the other Contracting State or which is engaged in
trade or business in such other Contracting State, such subsidiary
corporation shall not, merely because of that fact, be deemed to be a
permanent establishment of its parent corporation.
(j) The term ``competent authority'' or ``competent authorities''
means, in the case of the United States, the Commissioner of Internal
Revenue or his duly authorized representative; in the case of Greece,
the General Director of Direct Taxes, or his duly authorized
representative.
(2) In the application of the provisions of the present Convention
by either of the Contracting States, any term which is not defined in
the present Convention shall, unless the context otherwise requires,
have the meaning which that term has under the laws of such Contracting
State relating to the taxes which are the subject of the present
Convention.
* * * * *
Article VI
(1) Interest (on bonds, securities, notes, debentures, or on any
other form of indebtedness) received from sources within the United
States by a resident or corporation of Greece not engaged in trade or
business in the United States through a permanent establishment therein,
shall be exempt from United States tax; but such exemption shall not
apply to such interest paid by a United States corporation to a Greek
corporation controlling, directly or indirectly, more than 50 percent of
the entire voting power in the paying corporation.
(2) Interest (on bonds, securities, notes, debentures, or on any
other form of indebtedness) received from sources within Greece by a
resident or corporation of the United States not engaged in trade or
business in Greece through a permanent establishment therein, shall be
exempt from Greek tax but only to the extent that such interest does not
exceed 9 percent per annum; but such exemption shall not apply to such
interest paid by a Greek corporation to a United States corporation
controlling, directly or indirectly, more than 50 percent of the entire
voting power in the paying corporation.
Article VII
Royalties for the right to use copyrights, patents, designs, secret
processes and formulae, trade marks and other analogous property, and
royalties (including rentals), (other than those in respect of motion
picture films) for the use of industrial, commercial or scientific
equipment, derived from sources within one of the Contracting States by
a resident or corporation of the other Contracting State not engaged in
trade or business in the former State through a permanent establishment
therein, shall be exempt from tax by the former State.
Article VIII
A resident or corporation of one of the Contracting States, deriving
from sources within the other Contracting State royalties in respect to
the operation of mines, quarries, or other natural resources, or rentals
from real property, may elect for any taxable year to be subject to the
tax of such other Contracting State on the basis of net income as
determined under the laws of such other Contracting State during such
taxable year.
Article IX
Dividends and interest paid by a Greek corporation shall be exempt
from United States tax except where the recipient is a citizen, resident
or corporation of the United States.
* * * * *
Article XI
* * * * *
(2) Private pensions and life annuities derived from within one of
the Contracting States by an individual who is a resident of the other
Contracting State shall be exempt from taxation by the former
Contracting State.
(3) The term ``pensions'' as used in this Article means periodic
payments made in consideration for services rendered or by way of
compensation for injuries received.
(4) The term ``life annuities'' as used in this Article means a
stated sum payable periodically at stated times during life, or during
life, an obligation to make the payments in return for adequate and full
consideration in money or money's worth.
* * * * *
Article XV
(1) The authorities of each of the Contracting States, in accordance
with the practices of that State, may prescribe regulations necessary to
carry out the provisions of the present Convention.
(2) With respect to the provisions of the present Convention
relating to exchange of information and mutual assistance in the
[[Page 7]]
collection of taxes, the Contracting States may, in accordance with
their respective practices, prescribe rules concerning matters of
procedure, forms of application and replies thereto, conversion of
currency, disposition of amounts collected, minimum amounts subject to
collection, and related matters.
Article XVI
(1) The provisions of the present Convention shall not be construed
to restrict in any manner any exemption, deduction, credit or other
allowance accorded by the laws of one of the Contracting States in the
determination of the taxes imposed by such State.
(2) Should any difficulty or doubt arise as to the interpretation or
application of the present Convention, the competent authorities of the
Contracting States shall undertake to settle the question by mutual
agreement.
(3) The citizens or subjects of one of the Contracting States shall
not, while resident in the other Contracting State, be subjected therein
to other or more burdensome taxes than are the citizens or subjects of
such other Contracting State residing in its territory. The term
``citizens'' or ``subjects'', as used in this Article, includes all
legal persons, partnerships and associations deriving their status from,
or created or organized under, the laws in force in, the respective
Contracting States. In this Article the word ``taxes'' means taxes of
every kind or description whether national, federal, state, provincial
or municipal.
* * * * *
Article XVIII
The competent authorities of the Contracting States shall exchange
such information (being information which such authorities have at their
disposal) as is necessary for carrying out the provisions of the present
Convention or for the prevention of fraud or the administration of
statutory provisions against legal avoidance in relation to the taxes
which are the subject of the present Convention. Any information so
exchanged shall be treated as secret and shall not be disclosed to any
person other than those concerned with the assessment, and collection of
the taxes which are the subject of the present Convention. No
information shall be exchanged which would disclose a technical secret,
or process relating to trade, industry, business, or a profession.
* * * * *
Article XX
(1) In no case shall the provisions of Article XVIII and XIX be
construed so as to impose upon either of the Contracting States the
obligation:
(a) To carry out administrative measures at variance with the
regulations and practice of either Contracting State, or
(b) To supply information which is not procurable under its own
legislation or that of the State making application.
(2) The State to which application is made for information or
assistance shall comply as soon as possible with the request addressed
to it. Nevertheless, such State may refuse to comply with the request
for reasons of public policy or if compliance would involve disclosure
of a technical secret or process relating to trade, industry, business,
or a profession. In such case it shall inform, as soon as possible, the
State making the application.
Article XXI
(1) The present Convention shall be ratified and the instruments of
ratification shall be exchanged at Athens as soon as possible.
(2) The present Convention shall become effective on the first day
of January of the year in which the exchange of the instruments of
ratification takes place. It shall continue effective for a period of
five years beginning with that date and indefinitely after that period,
but may be terminated by either of the Contracting States at the end of
the five-year period or at any time thereafter, provided that at least
six months' prior notice of termination has been given, the termination
to become effective on the first day of January following the expiration
of the six-month period.
* * * * *
(b) As used in this part, any term defined in the convention shall
have the meaning so assigned to it; any term not so defined shall,
unless the context otherwise requires, have the meaning which such term
has under the internal revenue laws.