[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: 26CFR513.4]

[Page 58-59]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 513--IRELAND--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 513.4  Patent and copyright royalties and film rentals.

    (a) Royalties and other amounts (including rentals for the use of, 
or for the right to use, motion picture films) derived from sources 
within the United States and received in taxable years beginning on or 
after January 1, 1951, by a nonresident alien (including a nonresident 
alien individual, fiduciary, and partnership) who is resident in Ireland 
for the purposes of Irish tax, or by a foreign corporation (whether or 
not created or organized in or under the laws of Ireland) whose business 
is managed and controlled in Ireland, when paid as consideration for the 
use of, or for the privilege of using, copyrights, patents, designs, 
secret processes and formulae, trade-marks, and other like property, are 
exempt from United States tax under the provisions of Article VIII(1) 
and (3) of the convention if such alien or corporation is subject to 
Irish tax on such income and at no time during the taxable year had a 
permanent establishment within the United States. Such items of income

[[Page 59]]

are, therefore, not subject to the withholding provisions of the 
Internal Revenue Code. As to what constitutes a permanent establishment, 
see Article II(1)(l) of the convention.
    (b) The provisions of Sec. 513.2(a) relating to the degree of 
liability to Irish tax in the case of dividends are equally applicable 
with respect to the income falling within the scope of this section.
    (c) To obviate withholding at the source in the case of such items 
the nonresident alien resident in Ireland for the purposes of Irish tax, 
or the foreign corporation whose business is managed and controlled in 
Ireland, shall notify the withholding agent by letter in duplicate that 
such income is exempt from United States tax under the provisions of 
Article VIII of the convention. The provisions of Sec. 513.3(b) relating 
to the execution, filing, and effective period of the letter of 
notification prescribed therein with respect to interest are equally 
applicable with respect to the income falling within the scope of this 
section.
    (d) Each letter of notification, or the duplicate thereof, must be 
immediately forwarded by the withholding agent to the Commissioner of 
Internal Revenue, Clearing Branch, Washington 25, D.C.

    Effective Date Note:  By T.D. 8734, 62 FR 53498, Oct. 14, 1997, 
Sec. 513.4 was revised, 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. For the convenience of the user, the revised text is 
set forth as follows:

Sec. 513.4  Patent and copyright royalties and film rentals.

    The provisions of Sec. 513.2 relating to the degree of liability to 
Irish tax in the case of dividends are equally applicable with respect 
to the income falling within the scope of this section.

[62 FR 53498, Oct. 14, 1997]