[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: 26CFR509.119]

[Page 48-49]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 509--SWITZERLAND--Table of Contents
 
                       Subpart--General Income Tax
 
Sec. 509.119  Exchange of information.

    (a) General. (1) By Article XVI of the convention the United States 
and Switzerland adopt the principle of exchange of such information as 
is necessary for carrying out the provisions of the convention, 
preventing fraud, or detecting practices which are aimed at the 
reduction of the revenues of either country, but not including 
information which would be contrary to public policy or which would 
disclose any trade, business, industrial, or professional secret or any 
trade process.
    (2) The information and correspondence relative to exchange of 
information may be transmitted directly by the Commissioner to the 
Director of the Federal Tax Administration.
    (b) Return of information by withholding agents. (1) To facilitate 
compliance with Article XVI of the convention, every United States 
withholding agent shall make and file in duplicate with the District 
Director of Internal Revenue, Baltimore 2, Maryland, an information 
return on Form 1042 Supplement, with respect to persons having addresses 
in Switzerland, which shall be filed for the calendar year 1955 and 
subsequent calendar years. This return shall be filed simultaneously 
with Form 1042.
    (2) There shall be reported on such Form 1042 Supplement all items 
of fixed or determinable annual or periodical income (and amounts 
described in section 402(a)(2), section 631(b) and (c), and section 1235 
of the Internal Revenue Code of 1954, which are considered to be gains 
from the sale or exchange of capital assets) derived from sources within 
the United States and paid to nonresident aliens (including nonresident 
alien individuals, fiduciaries, and partnerships) and to nonresident 
foreign corporations, whose addresses at the time of payment were in 
Switzerland, including such items of income upon which, in accordance 
with the withholding regulations under the convention, no withholding of 
United States tax is required; except that any of such items which 
constitute interest in respect of which Form 1001-S or substitute Form 
1001-S has been filed in duplicate with the withholding agent is not 
required to be reported on such Form 1042 Supplement.
    (c) Information to be furnished in ordinary course. In compliance 
with the provisions of Article XVI of the convention the Commissioner 
will transmit to the Director of the Federal Tax Administration, as soon 
as practicable after the close of the calendar year 1955 and of each 
subsequent calendar year during which the convention is in effect, the 
following information relating to such preceding calendar year:
    (1) The duplicate copy of each available Form 1042 Supplement filed 
pursuant to paragraph (b) of this section; and
    (2) The duplicate copy of each available ownership certificate, Form 
1001-S, and substitute Form 1001-S, filed pursuant to the withholding 
regulations under the convention, in connection with coupon bond 
interest.
    (d) Information in specific cases. Under the provisions and 
limitations of Article XVI of the convention and upon request of the 
Director of the Federal Tax Administration, the Commissioner shall 
furnish to the Director information available to, or obtainable by, the 
Commissioner relative to the tax liability of any person under the 
revenue laws of Switzerland in any case in which such information is 
necessary for carrying out the provisions of the convention or for the 
prevention of fraud or the like in relation to the taxes which are the 
subject of the convention.

    Effective Date Note:  By T.D. 8734, 62 FR 53497, Oct. 14, 1997, 
Sec. 509.119 was removed, effective Jan. 1, 1999. By T.D. 8804, 63 FR 
72183,

[[Page 49]]

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.