[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: 26CFR520.102]

[Page 127-128]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 520--SWEDEN--Table of Contents
 
                       Subpart--General Income Tax
 
Sec. 520.102  Scope of this subpart.

    (a) The primary purposes of the convention, to be accomplished on a 
mutually reciprocal basis, are the avoidance of double taxation, 
exchange of fiscal information complementary to those provisions of the 
convention relating to avoidance of double taxation, and mutual 
assistance in the collection of the taxes to which the convention 
relates. The regulations in this subject deal primarily with the effect 
of the convention upon the determination of taxable income from sources 
within the United States of nonresident alien individuals resident in 
Sweden and of Swedish corporations and other Swedish entities, and with 
the information to be made available to the Finance Minister of Sweden.
    (b) The specific classes of income from sources within the United 
States exempt by reason of the convention from United States income tax 
are:
    (1) Industrial and commercial profits of a Swedish enterprise having 
no permanent establishment in the United States (Article II);
    (2) Income derived by a Swedish enterprise from the operation of 
ships or aircraft registered in Sweden (Article IV);
    (3) Royalties and amounts derived by a nonresident alien individual 
resident in Sweden or by a Swedish corporation or other entity as 
consideration for the right to use copyrights, patents, secret processes 
and formulas, trade-marks and other analogous rights (Article VI);
    (4) Gains derived from the sale or exchange of capital assets by a 
nonresident alien individual resident in Sweden, or by a Swedish 
corporation or other entity, having no permanent establishment in the 
United States (Article IX);
    (5) Wages, salaries and similar compensation and pension paid by 
Sweden or by a political subdivision thereof to individuals (other than 
citizens of the United States) temporarily residing in the United States 
(Article X);
    (6) Private pensions and life annuities paid to nonresident alien 
individuals residing in Sweden (Article X),
    (7) Compensation for labor or personal services performed within the 
United States by a nonresident alien individual resident in Sweden, such 
exemption being, however, subject to the limitations set forth in 
Article XI of the convention and in Sec. 520.113;
    (8) Remittances from sources within Sweden (if and to the extent 
that they constitute gross income without regard to this convention) 
received in the United States by a nonresident alien individual resident 
of Sweden who is temporarily resident in the United States for the 
purposes of study or for acquiring business experience, such remittances 
being for the purposes of their maintenance or studies (Article XII).
    (c) The convention does not affect the liability to United States 
income tax of Swedish citizens resident in the United States except to 
the extent such citizens are entitled to the benefits of Article XIV of 
the convention. For the purposes of the convention, an individual 
resident in neither Sweden nor the United States and claiming the 
benefits of the convention as a citizen of Sweden shall be deemed to be 
a resident of Sweden if it is shown to the satisfaction of the 
Commissioner that he is such citizen. With respect to dividends and 
interest, see Sec. 520.10.
    (d) Except as to those items of income expressly exempted by the 
convention, the income tax liability of a nonresident alien individual 
resident of Sweden and of a Swedish corporation or other entity is 
determined in accordance with the provisions of the internal revenue 
laws of the United States and the regulations thereunder

[[Page 128]]

applicable generally to the taxation of nonresident alien individuals 
and foreign corporations.
    (e) Except insofar as concerns dividends, the convention makes no 
reference to rates of taxation imposed by the United States.