[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: 26CFR513.7]
[Page 60-62]
TITLE 26--INTERNAL REVENUE
CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
(Continued)
PART 513--IRELAND--Table of Contents
Subpart--Withholding of Tax
Sec. 513.7 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 from dividends, natural resource royalties, and real property
rentals, and
(ii) The exemption from tax otherwise withheld at the source from
interest, patent royalties, copyright royalties, film rentals, and the
like,
are hereby made effective beginning January 1, 1952, in any case in
which such natural resource royalties, real property rentals, interest,
patent royalties, copyright royalties, film rentals, and the like are
derived from sources within the United States, or in which such
dividends are derived from a United States corporation, by a nonresident
alien (including a nonresident alien individual, fiduciary, and
partnership) who is resident in Ireland for the purposes of Irish tax,
or by a foreign corporation whose business is managed and controlled in
Ireland, if such alien or corporation is subject to Irish tax on such
income and at no time during the taxable year in which such income is so
derived had a permanent establishment within the United States.
(2) In the case of every such taxpayer whose address at the time of
payment was in Ireland and who furnishes to the withholding agent the
letter of notification prescribed in Secs. 513.3(b), 513.4, or
Sec. 513.5, where United States tax at the rate of 30 percent has been
withheld on or after January 1, 1952, there shall be released (except as
provided in paragraph (e) of this section) by the withholding agent and
paid over to the person from whom it was withheld:
(i) In the case of natural resource royalties and real property
rentals, an amount equal to 15 percent of such royalties and rentals,
and
(ii) In the case of interest (other than coupon bond interest),
patent royalties, copyright royalties, film rentals,
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and the like, an amount equal to the tax so withheld.
(3) In the case of every such taxpayer whose address at the time of
payment was in Ireland and who furnishes to the withholding agent Form
1001-IR in duplicate, where United States tax at the rate of 28 percent
or 30 percent, as the case may be, has been withheld from coupon bond
interest on or after January 1, 1952, there shall be released (except as
provided in paragraph (e) of this section) by the withholding agent and
paid over to the person from whom it was withheld an amount equal to the
tax so withheld, if such taxpayer also files in duplicate with the
withholding agent as authorization for the release of such amount a Form
1001-IR clearly marked ``Substitute''. One such substitute form shall be
filed in duplicate with respect to each issue of bonds and will serve
with respect to that issue to replace all Forms 1001 previously filed by
such taxpayer in the calendar year in which the excess tax is released.
The use of Form 1001-IR with each presentation of interest coupons for
the purpose of obviating withholding of tax at source is set forth in
Sec. 513.3(b).
(4) In the case of dividends derived from a United States
corporation and paid to a nonresident alien (including a nonresident
alien individual, fiduciary, and partnership) or to a foreign
corporation, whose address at the time of payment was in Ireland, where
United States tax at the rate of 30 percent has been withheld from such
dividends on or after January 1, 1952, there shall be released (except
as provided in paragraph (d) of this section) by the withholding agent
and paid over to the person from whom it was withheld an amount equal to
15 percent of such dividends.
(b) Amounts withheld during 1951. For provisions respecting the
refund of excess tax withheld during the calendar year 1951, see
Sec. 513.11.
(c) Pensions and life annuities. (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 from life annuities
and pensions, other than pensions paid by the Government of the United
States to individuals in respect of services rendered thereto in the
discharge of governmental functions, is hereby made effective beginning
January 1, 1952, 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 resident in Ireland for the purposes of Irish tax.
(2) In the case of every such taxpayer whose address at the time of
payment was in Ireland and who furnishes to the withholding agent the
letter of notification prescribed in Sec. 513.6, where United States tax
at the rate of 30 percent has been withheld on or after January 1, 1952,
from such pensions or life annuities, as the case may be, 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.
(d) Subsidiary's dividends. (1) United States tax shall be withheld
at the rate of 15 percent from any dividend derived from a United States
corporation and paid on or after January 1, 1952, to a foreign
corporation whose address is in Ireland unless, prior to the date of
payment thereof, the Commissioner of Internal Revenue notifies the
domestic corporation that such dividend falls within the scope of the
proviso of Article VI(1) of the convention.
(2) In the case of every domestic corporation receiving notification
from the Commissioner of Internal Revenue under the provisions of
Sec. 513.2(b) that dividends paid or to be paid by it fall within the
scope of the proviso of Article VI(1) of the convention, where United
States tax in excess of the applicable rate of 5 percent has been
withheld on or after January 1, 1952, from dividends which come within
the scope of such proviso, the withholding agent shall, if so authorized
in such notification, release and pay over to the foreign corporation
from which it was withheld the excess tax withheld with respect to such
dividends.
(e) Interest paid where degree of stock ownership is determined. In
the case of every foreign corporation whose address at the time of
payment was in Ireland and which (1) furnishes to the domestic
corporation a copy of the Commissioner's authorization of release
prescribed in Sec. 513.3(c) and (2) files the letter of notification
prescribed in
[[Page 62]]
Sec. 513.3(b), or the substitute Form 1001-IR prescribed in paragraph
(a) of this section, whichever is applicable, where United States tax at
the rate of 28 percent or 30 percent, as the case may be, has been
withheld on or after January 1, 1952, the withholding agent shall
release and pay over to the foreign corporation from which it was
withheld an amount equal to the tax so withheld.