[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: 26CFR503.6]

[Page 22-23]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 503--GERMANY--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 503.6  Release of excess tax withheld at source.

    (a) General. (1) In order to give the convention effective 
application at the earliest practicable date, the exemptions from, and 
reduction in the rate of, withholding of United States tax at source 
granted by this Treasury decision are hereby made effective beginning 
January 1, 1954, contingent upon compliance with the applicable 
provisions of Secs. 503.2 through 503.5.
    (2) In the case of dividends and interest paid by a German company 
(other than a United States corporation) to a nonresident alien or to a 
foreign corporation, if United States tax at the statutory rate has been 
withheld on or after January 1, 1954, there shall be released by the 
withholding agent and paid over to the person from whom it was withheld, 
an amount equal to the tax so withheld from such items.
    (3) In the case of every taxpayer whose address at the time of 
payment was in the Federal Republic of Germany and who furnishes to the 
withholding agent the letter of notification prescribed in 
Secs. 503.2(b), 503.3(b), 503.4(b), and 503.5(b) as authorization for 
the release of excess tax withheld, if United States tax at the 
statutory rate has been withheld on or after January 1, 1954, from the 
items of income in respect of which such letter is prescribed in such 
sections, there shall be released (except as provided in paragraph (b) 
of this section) by the withholding agent and paid over to the person 
from whom it was withheld:
    (i) In the case of dividends, the difference between the tax so 
withheld and the tax required to be withheld pursuant to Sec. 503.2(b); 
and
    (ii) In the case of interest (other than coupon bond interest), 
copyright royalties and other items to which Sec. 503.4 is applicable, 
and private pensions and private life annuities as defined in Article XI 
of the convention, an amount equal to the tax so withheld from such 
items.
    (4) In the case of every taxpayer whose address at the time of 
payment was in the Federal Republic of Germany and who furnishes to the 
withholding agent Form 1001-GER clearly marked ``Substitute'' and 
executed in accordance with Sec. 503.3(b), if United States tax at the 
statutory rate has been withheld from coupon bond interest on or after 
January 1, 1954, there shall be released by the withholding agent and 
paid over to the person from whom it was withheld an amount equal to the 
tax so withheld from such interest. One such substitute form shall be 
filed in duplicate with respect to each

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issue of bonds and will serve with respect to that issue to replace all 
Forms 1001 previously filed by the taxpayer in the calendar year in 
which the excess tax was withheld and with respect to which such excess 
is released.
    (5) The original and duplicate of substitute Form 1001-GER shall be 
forwarded by the withholding agent to the District Director of Internal 
Revenue, Audit Division, Alien Returns Section, Baltimore 2, Maryland, 
with the quarterly return on Form 1012. Substitute Form 1001-GER need 
not be listed on Form 1012.
    (b) Interest paid where degree of stock ownership is determined. If 
United States tax at the statutory rate has been withheld on or after 
January 1, 1954, from dividends described in Sec. 503.2(a)(2) and paid 
to a German company (other than a United States corporation), and if the 
relationship existing between the German company and the paying 
corporation was, at the time the dividends were paid, such as to render 
uncertain whether, by reason of the requirement contained in Article VI 
of the convention as to stock ownership, such dividends qualified for 
the reduced rate of United States tax, the withholding agent shall 
release and pay over to the German company the difference between the 
tax so withheld and the tax required to be withheld pursuant to 
Sec. 503.2(b), only if the German company (1) furnishes to the 
withholding agent a copy of the Commissioner's authorization of release 
prescribed in Sec. 503.2(c)(5), and (2) files the letter of notification 
prescribed in Sec. 503.2(b)(1).