[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: 26CFR513.5]

[Page 59-60]
 
                       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. 513.5  Natural resource royalties and real property rentals.

    (a) Under Article IX of the convention the rate of tax imposed with 
respect to natural resource royalties and real property rentals by 
section 211(a) of the Internal Revenue Code (relating to nonresident 
alien individuals not engaged in trade or business within the United 
States) and by section 231(a) of the Internal Revenue Code (relating to 
foreign corporations not engaged in trade or business within the United 
States) is reduced to 15 percent in the case of royalties in respect of 
the operation of mines or quarries or of other extraction of natural 
resources, and in the case of rentals from real property or from an 
interest in such property, derived from sources within the United States 
and received in taxable years beginning on or after January 1, 1951, 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 (whether or not created or 
organized in or under the laws of Ireland) 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 had a 
permanent establishment within the United States. As to what constitutes 
a permanent establishment, see Article II(1)(l) of the convention.
    (b) The provisions of Sec. 513.2(a) relating to the degree of 
liability to Irish tax in the case of dividends are equally applicable 
with respect to the income falling within the scope of this section.
    (c) To secure the reduced rate of tax at the source in the case of 
such items the nonresident alien resident in Ireland for the purposes of 
Irish tax, or the foreign corporation whose business is managed and 
controlled in Ireland, shall notify the withholding agent by letter in 
duplicate that the rate of United States tax with respect to such income 
is reduced to 15 percent under the provisions of Article IX of the 
convention. The provisions of Sec. 513.3(b) relating to the execution, 
filing, and effective period of the letter of notification prescribed 
therein with respect to interest are equally applicable with respect to 
the income falling within the scope of this section.
    (d) Each letter of notification, or the duplicate thereof, must be 
immediately forwarded by the withholding agent to the Commissioner of 
Internal Revenue, Clearing Branch, Washington 25, D.C.

    Effective Date Note:  By T.D. 8734, 62 FR 53498, Oct. 14, 1997, 
Sec. 513.5 was revised, effective Jan. 1, 1999. By T.D. 8804, 63 FR 
72183, Dec. 31, 1998, the effective date was delayed

[[Page 60]]

until Jan. 1, 2000. By T.D. 8856, 64 FR 73408, Dec. 30, 1999, the 
effective date was delayed until Jan. 1, 2001. For the convenience of 
the user, the revised text is set forth as follows:

Sec. 513.5  Natural resource royalties and real property rentals.

    The provisions of Sec. 513.2 relating to the degree of liability to 
Irsh tax in the case of dividends are equally applicable with respect to 
the income falling within the scope of this section.

[62 FR 53498, Oct. 14, 1997]