[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: 26CFR517.5]

[Page 119]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 517--PAKISTAN--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 517.5  Interest derived by the State Bank of Pakistan.

    (a) Exemption from United States tax. Any interest of the State Bank 
of Pakistan which is received from sources within the United States on 
or after January 1, 1956, is, to the extent not exempt from tax under 
section 892 of the Internal Revenue Code of 1954, exempt from United 
States tax under the provisions of Article XIV(1) of the convention.
    (b) Exemption from withholding of tax. No withholding of United 
States tax is required in the case of interest received from sources 
within the United States by the State Bank of Pakistan if, in accordance 
with paragraph (a) of this section, the interest is exempt from United 
States tax.
    (c) Refund of excess tax withheld before January 1, 1959. If United 
States tax has been withheld before January 1, 1959, and on or after 
January 1, 1956, from interest of the State Bank of Pakistan, a claim by 
the bank for the refund of any overpayment resulting therefrom may be 
made under section 6402 of the Internal Revenue Code of 1954 and the 
regulations thereunder. For the release of excess tax withheld from such 
interest on or after January 1, 1959, see Sec. 517.7(a)(4).