[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: 26CFR520.110]

[Page 130-131]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 520--SWEDEN--Table of Contents
 
                       Subpart--General Income Tax
 
Sec. 520.110  Dividends and interest.

    (a) In general dividends derived from sources within the United 
States by a nonresident alien individual resident in Sweden or by a 
Swedish corporation or other entity remain subject to taxation under the 
provisions of the Internal Revenue Code applicable generally to the 
taxation of nonresident alien individuals and foreign corporations. See 
Article XIV (a) of the convention. However, for a period of at least 2 
years beginning on January 1, 1940, the tax in the case of such alien 
individual resident in Sweden or such Swedish corporation or other 
entity (nonresident

[[Page 131]]

as to the United States) shall not exceed 10 percent of the amount of 
such dividends. See Article VII of the convention. Hence, the higher 
rates applicable generally in the case of nonresident alien individuals 
subject to the provisions of section 211 (c), Internal Revenue Code, are 
not applicable to dividends received by nonresident alien individuals 
who are residents of Sweden.
    (b) The taxation of interest derived from sources within the United 
States by a nonresident alien individual resident in Sweden or by a 
Swedish corporation or other entity is not affected by the convention 
except that in the case of such individual such interest is subject only 
to the rate of tax imposed by section 211 (a), Internal Revenue Code. 
Hence, interest, like dividends, is excluded for the purposes of section 
211(c), from the gross amount of fixed or determinable annual or 
periodical income of nonresident alien individuals who are residents of 
Sweden.