[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: 26CFR514.5]

[Page 68-69]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 514--FRANCE--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 514.5  Patent and copyright royalties and film rentals.

    (a) Exemption from tax. Royalties for the right to use copyrights, 
patents, designs, secret processes and formulae, trademarks, and other 
analogous property, and royalties and rentals in respect of motion 
picture films or for the use of industrial, commercial, or scientific 
equipment, which are derived from sources within the United States on or 
after January 1, 1945, by a nonresident alien individual who is a 
resident of France, or by a French corporation, are exempt from United 
States tax under the provisions of Article 7 of the convention signed 
July 25, 1939, as modified by Article 7(b) of the convention signed 
October 18, 1946, if such alien or corporation at no time during the 
taxable year in which such income

[[Page 69]]

is derived has engaged in trade or business within the United States 
through a permanent establishment situated therein.
    (b) Exemption from withholding of United States tax. To avoid 
withholding of United States tax at source in the case of items of 
income to which this section applies, the nonresident alien who is a 
resident of France, or the French corporation, shall file Form 1001A-F, 
in duplicate, with the withholding agent in the United States.
    (c) Manner of filing. The provisions of Sec. 514.4 relating to the 
execution, filing, effective period, and disposition of Form 1001A-F, 
are equally applicable with respect to the income falling within the 
scope of this section.
    (d) Revocation of 26 CFR (1939) 7.418 (Treasury Decision 5499). 
Effective January 1, 1957, the provisions of 26 CFR 7.418 (Rev. 1953, 
Parts 1-79, and Supps.) (Treasury Decision 5499, 11 F.R. 2158), approved 
February 27, 1946, are hereby made inapplicable, and the provisions of 
this section are hereby substituted therefor with respect to payments of 
royalties and film rentals made on or after January 1, 1957.