[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: 26CFR516.6]

[Page 108]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 516--AUSTRIA--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 516.6  Private pensions and private life annuities.

    (a) Exemption from tax. Private pensions and private life annuities 
which are from sources within the United States and are paid on or after 
January 1, 1957, to a nonresident alien individual who is a resident of 
Austria are exempt from United States tax under the provisions of 
Article XI (2) of the convention.
    (b) Exemption from withholding of United States tax--(1) 
Notification by letter. To avoid withholding of United States tax at 
source on or after January 1, 1958, in the case of the items of income 
to which this section applies, the nonresident alien individual who is a 
resident of Austria shall notify the withholding agent by letter in 
duplicate that the income is exempt from United States tax under the 
provisions of Article XI (2) of the convention. The letter of 
notification shall be signed by the owner of the income, shall show the 
name and address of both the payer and the owner of the income, and 
shall contain a statement that the owner, an individual, is neither a 
citizen nor a resident of the United States but is a resident of 
Austria.
    (2) Use of letter for release of tax. If the letter is also to be 
used as authorization for the release, pursuant to Sec. 516.9(a)(5), of 
excess tax withheld from such items of income, it shall also contain a 
statement that the owner was, at the time when the income was paid from 
which the excess tax was withheld, neither a citizen nor a resident of 
the United States but was a resident of Austria.
    (3) Manner of filing letter. The letter of notification shall 
constitute authorization for the payment of such items of income without 
withholding of United States tax at source unless the Commissioner of 
Internal Revenue subsequently notifies the withholding agent that the 
tax shall be withheld with respect to payments of such items of income 
made after receipt of such notice. If, after filing a letter of 
notification, the owner of the income ceases to be eligible for the 
exemption from United States tax granted by the convention in respect to 
such income, he shall promptly notify the withholding agent by letter in 
duplicate. When any change occurs in the ownership of the income as 
recorded on the books of the payer, the exemption from withholding of 
United States tax shall no longer apply unless the new owner of record 
is entitled to and does properly file a letter of notification with the 
withholding agent.
    (4) Disposition of letter. Each letter of notification, or the 
duplicate thereof, shall be immediately forwarded by the withholding 
agent to the Director of International Operations, Internal Revenue 
Service, Washington, D.C.
    (c) Definitions. As used in this section, the term ``pensions'' 
means periodic payments made in consideration for services rendered or 
by way of compensation for injuries received, and the term ``life 
annuities'' means a stated sum payable periodically at stated times 
during life, or during a specified number of years, under an obligation 
to make the payments in return for adequate and full consideration in 
money or money's worth. Neither term includes retired pay or pensions 
paid by the United States or by any State or Territory of the United 
States.

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