[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: 26CFR514.22]
[Page 79-80]
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. 514.22 Dividends received by persons not entitled to reduced rate of tax.
(a) General. Article 27(1) of the convention provides that each
Contracting State shall undertake to lend assistance and support to the
other Contracting State in the collection of taxes covered by the
convention.
(b) Additional French tax to be withheld in the United States--(1)
By a nominee or representative. The recipient in the United States of
any dividend from which French tax has been withheld at the reduced rate
of 15 percent, who is a nominee or representative through whom the
dividend is received by a person who is not a resident of the United
States, shall withhold an additional amount of French tax equivalent to
the French tax which would have been withheld if the convention had not
been in effect (25 percent as of the date of approval of this Treasury
decision) minus the 15 percent which has been withheld at the source.
(2) By a fiduciary or partnership. A fiduciary or partnership with
an address in the United States which receives, otherwise than as a
nominee or representative, a dividend from sources within France from
which French tax has been withheld at the reduced rate of 15 percent,
shall withhold an additional amount of French tax from the portion of
the dividend included in the gross income from sources within France of
any beneficiary or partner, as the case may be, who is not entitled to
the reduced rate of tax in accordance with the applicable provisions of
the convention. The amount of the additional tax is to be calculated in
the same manner as under subparagraph (1) of this paragraph.
(3) Withholding additional French tax from amounts released or
refunded. If any amount of French tax is released by the withholding
agent in France with respect to a dividend received by a nominee,
representative, fiduciary, or partnership in the United States, the
recipient shall withhold from such released amount any additional amount
of French tax otherwise required to be withheld from the dividend by the
provisions of subparagraphs (1) and (2) of this paragraph, in the same
manner as if at the time of payment of the dividends French tax at the
rate of 15 percent had been withheld therefrom.
(4) Return of French tax by U.S. withholding agents. Amounts of
French tax withheld pursuant to this paragraph by withholding agents in
the United
[[Page 80]]
States shall be deposited in U.S. dollars with the Director, Office of
International Operations, Internal Revenue Service, Washington, D.C.
20225, on or before the 16th day after the close of the quarter of the
calendar year in which the withholding occurs. Such withholding agent
shall also submit such appropriate forms as may be prescribed by the
Commissioner of Internal Revenue.
(c) Additional U.S. tax to be withheld in France--(1) By a nominee
or representative. The recipient in France of any dividend from which
U.S. tax has been withheld at the reduced rate of 15 percent pursuant to
Sec. 514.21(b)(1), who is a nominee or representative through whom the
dividend is received by a person who is not entitled to the reduced rate
in accordance with Sec. 514.21(a)(3)(i), shall withhold an additional
amount of U.S. tax equivalent to the U.S. tax which would have been
withheld if the convention had not been in effect (30 percent as of the
date of approval of this Treasury decision) minus the 15 percent which
has been withheld at the source.
(2) By a fiduciary or partnership. A fiduciary or partnership with
an address in France which receives, otherwise than as a nominee or
representative, a dividend from which U.S. tax has been withheld at the
reduced rate of 15 percent pursuant to Sec. 514.21(b)(1) shall withhold
an additional amount of U.S. tax from the portion of the dividend
included in the gross income from sources within the United States of
any beneficiary or partner, as the case may be, who is not entitled to
the reduced rate of tax in accordance with Sec. 514.21(a)(3)(i). The
amount of the additional tax is to be calculated in the same manner as
under subparagraph (1) of this paragraph.
(3) Released amounts of tax. If any amount of U.S. tax is released
pursuant to Sec. 514.28 by the withholding agent in the United States
with respect to a dividend received by a nominee, representative,
fiduciary, or partnership with an address in France, the recipient shall
withhold from such released amount any additional amount of U.S. tax,
otherwise required to be withheld from the dividend by the provisions of
subparagraphs (1) and (2) of this paragraph, in the same manner as if at
the time of payment of the dividends U.S. tax at the rate of 15 percent
has been withheld at source therefrom.
(4) Return of U.S. tax by French withholding agents. Amounts of U.S.
tax withheld pursuant to this paragraph by withholding agents in France
shall be deposited without converting the amounts into U.S. dollars,
with the Directeur General des Impots of France on or before the 16th
day after the close of the quarter of the calendar year in which the
withholding occurs. The withholding agent making the deposit shall
render therewith such appropriate French form as may be prescribed by
the Directeur General des Impots. The amounts so deposited should be
remitted by the Directeur General des Impots by draft in United States
dollars to the director, Office of International Operations, Internal
Revenue Service, Washington, D.C. 20225, and should be accompanied by
such French form as may be required to be rendered by the withholding
agent in France in connection with the deposit.
Effective Date Note: By T.D. 8734, 62 FR 53498, Oct. 14, 1997,
Sec. 514.22 was amended by removing paragraph (c), effective Jan. 1,
1999. By T.D. 8804, 63 FR 72183, Dec. 31, 1998, the effective date was
delayed until Jan. 1, 2000. By T.D. 8856, 64 FR 73408, Dec. 30, 1999,
the effective date was delayed until Jan. 1, 2001.