[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: 26CFR521.6]

[Page 139-140]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 521--DENMARK--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 521.6  Release of excess tax withheld at source.

    (a) General. (1) In order to bring the convention into force and 
effect at the earliest practicable date:
    (i) The reduced rate of tax of 15 percent to be withheld at the 
source on dividends, and
    (ii) Exemption from tax otherwise withheld at the source on 
interest, patent royalties, copyright royalties, film rentals and the 
like,

are hereby made effective beginning January 1, 1948 in any case in which 
such dividends, interest, patent royalties, copyright royalties, film 
rentals and the like are derived from sources within the United States 
by a nonresident alien including a nonresident alien individual, 
fiduciary and partnership who is a resident of Denmark, or a Danish 
corporation.
    (2) Accordingly, in the case of dividends paid to a nonresident 
alien (including a nonresident alien individual, fiduciary, and 
partnership) whose address at the time of payment was in Denmark, or to 
a Danish corporation whose address at the time of payment was in 
Denmark, where tax at the rate of 30 percent has been withheld on or 
after January 1, 1948, from dividends, there shall be released by the 
withholding agent and paid over to the person from whom it was withheld 
an amount equal to 15 percent of such dividends.
    (3) In the case of every such taxpayer who furnishes to the 
withholding agent Form 1001-D, as prescribed in Sec. 521.3 or

[[Page 140]]

521.4, where tax at the rate of 30 percent has been withheld on or after 
January 1, 1948, there shall be released by the withholding agent and 
paid over to the person from whom withheld an amount equal to the amount 
so withheld in the case of interest (as to coupon bond interest, see 
paragraph (4) of this paragraph), patent royalties, copyright royalties, 
film rentals and the like.
    (4) In the case of every such taxpayer who furnishes to the 
withholding agent Form 1001-D, in duplicate, where tax at the rate of 28 
percent or 30 percent, as the case may be, has been withheld on or after 
January 1, 1948, from coupon bond interest, 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 withheld from such interest. Form 
1001-D used for this purpose should be clearly marked ``Substitute'' in 
order to replace Forms 1001 previously filed. One Form 1001-D, in 
duplicate, may be used to replace two or more Forms 1001. The form 
marked ``Substitute'' is to be used solely for the release of excess tax 
withheld in 1948. The use of Form 1001-D for the purpose of exemption 
upon presentation of interest coupons is set forth in Sec. 521.3 (b).
    (b) Private pensions and life annuities paid in 1948 or subsequent 
years. (1) In order to bring the convention into force and effect at the 
earliest practicable date, the exemption from tax otherwise withheld at 
the source on private pensions and life annuities is made effective 
beginning January 1, 1948, in any case in which such pensions and life 
annuities are derived from sources within the United States by a 
nonresident alien individual who is a resident of Denmark.
    (2) The person paying such income should be notified by letter from 
the resident of Denmark that the income is exempt from taxation under 
the provisions of Article X(2) of the convention. See Sec. 521.5. Such 
letter will constitute authorization to the payor of the income to 
release the tax withheld on or after January 1, 1948, with respect to 
such pensions or life annuities.
    (c) Subsidiary's dividends. With respect to a dividend paid on or 
after January 1, 1948, by a domestic corporation to a Danish corporation 
whose address is in Denmark, tax shall be withheld in accordance with 
the provisions of Sec. 521.2 unless prior to the date of payment of such 
dividend the Commissioner of Internal revenue has notified the paying 
corporation that such dividend falls within the scope of Article VI (3) 
of the convention. As soon as practicable after information required 
under Sec. 521.2 (b) is filed, the Commissioner of Internal Revenue will 
determine whether the dividend involved falls within the scope of 
Article VI (3) and may authorize the release of the excess tax withheld 
with respect to dividends which come within the scope of such provision.