[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: 26CFR509.4]
[Page 30]
TITLE 26--INTERNAL REVENUE
CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
(Continued)
PART 509--SWITZERLAND--Table of Contents
Subpart--Withholding of Tax
Sec. 509.4 Patent and copyright royalties and film rentals.
Royalties and other amounts received in taxable years beginning on
or after January 1, 1951, from sources within the United States by a
nonresident alien (including a nonresident alien individual, fiduciary,
and partnership) who is a resident of Switzerland or by a Swiss
corporation, as consideration for the right to use copyrights, artistic
and scientific works, patents, designs, plans, secret processes and
formulae, trade-marks, and other like property and rights (including
rentals and like payments in respect to motion picture films or for the
use of industrial, commercial, or scientific equipment), are exempt from
United States tax under the provisions of Article VIII of the convention
if such alien or corporation at no time during the taxable year in which
such royalties or other amounts are received has had a permanent
establishment within the United States. Such items are therefore not
subject to the withholding provisions of the Internal Revenue Code. As
to what constitutes a permanent establishment, see Article II(1)(c) of
the convention.
To obviate withholding at the source in the case of such items, the
nonresident alien who is a resident of Switzerland or the Swiss
corporation shall file Form 1001A-S, in duplicate, with the withholding
agent in the United States. The provisions of Sec. 509.3(b) relating to
the execution and effective period of such form with respect to interest
are equally applicable with respect to the income falling within the
scope of this section.
The duplicate of Form 1001A-S must be immediately forwarded by the
withholding agent to the Commissioner of Internal Revenue, Records
Division, Washington, D.C.