[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: 26CFR514.25]

[Page 83-84]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 
                               (Continued)
 
PART 514--FRANCE--Table of Contents
 
                       Subpart--Withholding of Tax
 
Sec. 514.25  Private pensions, alimony, and annuities.

    (a) Exemption from U.S. tax--(1) Requirements. Any pension (other 
than one paid by the United States or a political subdivision or a local 
authority

[[Page 84]]

thereof to an individual who is a citizen of the United States for the 
discharge of governmental functions), alimony, or annuity derived from 
sources within the United States by a nonresident alien individual who 
is a resident of France and received in a taxable year of the recipient 
beginning after December 31, 1966, shall be exempt from U.S. tax under 
the provisions of Article 19 of the convention.
    (2) Definitions--(i) Pension. As used in this paragraph, the term 
``pension'' means periodic payments made after retirement in 
consideration of past employment or as compensation for injuries 
received in connection with past employment. The term ``pension'' does 
not include retirement pay or pensions paid by the United States or by 
any State or local authority of the United States which are subject to 
tax in accordance with the provisions of Article 16 of this convention.
    (ii) Annuity. The term ``annuity'' means a stated sum paid 
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 (other than services rendered), but not 
including retirement pay or pensions paid by the United States or by any 
State or territory of the United States.
    (b) Exemption from withholding tax--(1) Use of letter of 
notification. To avoid withholding of U.S. tax at source with respect to 
pensions, alimony, or annuities which are exempt from U.S. tax in 
accordance with paragraph (a) of this section, the nonresident alien 
individual who is a resident of France shall notify the withholding 
agent by letter in duplicate that the pension, alimony, or annuity is 
exempt from U.S. tax under Article 19 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 at the time the income is received, the 
owner is neither a citizen nor a resident of the United States but is a 
resident of France.
    (2) Manner of filing letter. The provisions of Sec. 514.23(c)(2)(ii) 
and (iii) relating to the execution, filing, and effective period of the 
letter of notification prescribed therein with respect to interest, 
including its use for the release of excess tax withheld and 
Sec. 514.23(c)(3) relating to change of circumstances, are equally 
applicable with respect to the income falling within the scope of this 
section.

    Effective Date Note:  By T.D. 8734, 62 FR 53498, Oct. 14, 1997, 
Sec. 514.25 was removed, 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.