[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: 26CFR509.112]

[Page 44-45]
 
                       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. 509.112  Compensation for labor or personal services.

    (a) Exemption from tax. Under Article X of the convention 
compensation received by a nonresident alien individual who is a 
resident of Switzerland for labor or personal services, including the 
practice of the liberal professions and the rendition of services as a 
director, performed in the United States shall not be included in gross 
income and shall be exempt from United States tax in either of the 
following situations:

[[Page 45]]

    (1) Swiss employer. Where such individual is temporarily present in 
the United States for a period or periods not exceeding in the aggregate 
a total of 183 days during a taxable year beginning on or after January 
1, 1951, any compensation received by him (irrespective of when 
received, if received in taxable years beginning on or after January 1, 
1951) for such labor or personal services performed in the United States 
during such year as an employee of, or under contract with, a 
nonresident alien (including a nonresident alien individual and 
fiduciary) who is a resident of Switzerland, or a Swiss corporation or 
other entity, whether or not such alien, corporation, or other entity is 
engaged in trade or business within the United States, shall not be 
included in gross income and shall be exempt from United States tax.
    (2) Other employers. Where such individual is temporarily present in 
the United States for a period or periods not exceeding in the aggregate 
a total of 183 days during a taxable year beginning on or after January 
1, 1951, any compensation received by him (irrespective of when 
received, if received in taxable years beginning on or after January 1, 
1951) for such labor or personal services performed in the United States 
during such year shall not be included in gross income and shall be 
exempt from United States tax if such compensation does not exceed 
$10,000 in the aggregate. Thus, if a nonresident alien individual who is 
a resident of Switzerland performs personal services in the United 
States during the taxable year as an employee of a domestic corporation 
for which he receives compensation of $15,000 in the aggregate, none of 
such compensation shall be exempt from United States tax even though 
such individual is present in the United States during such year for a 
period or periods not exceeding a total of 183 days, since the aggregate 
compensation received is in excess of $10,000.
    (b) Definitions. For purposes of this section, the term 
``compensation for labor or personal services'' shall include, but shall 
not be limited to, the compensation, profits, emoluments, or other 
remuneration of public entertainers, such as, stage, motion picture, 
television, or radio artists, musicians, and athletes. For the 
allocation or segregation as between sources within, and sources 
without, the United States in the case of compensation for labor or 
personal services, see sections 861 through 864, Internal Revenue Code 
of 1954, and the regulations thereunder.
    (c) Exception. The provisions of this section have no application to 
the income to which Article XI(1) of the convention relates.