Voglio sapere a riguardo di…

Tuesday, March 8, 1949
the three-year period immediately pre ceding the taxable year in which the dividend is paid; 5 the amount of in terest and dividends, by years, in cluded in the gross income of such domestic corporation, and the amount of interest and dividends, by years, re ceived by such corporation from its subsidiary corporations, if any; and 6
the relationship between the domestic corporation and the Netherlands cor poration to which it payg the dividend.
As soon as practicable after such in formation is filed, the Commissioner of Internal Revenue will determine whether the dividends concerned fall within the scope of the proviso of Article VII 1 of the convention and may authorize the re lease of excess tax withheld with respect to dividends which come within such proviso. In any case in which the Com missioner of Internal Revenue has noti fied such domestic corporation that it comes within such proviso, the reduced rate of 5 percent applies to any dividends subsequently paid by such corporation to the Netherlands corporation unless the stock ownership of the domestic corpo ration, or the character of its income materially changes, and, if such change or changes occur, such corporation shall promptly notify the Commissioner of In ternal Revenue of the then existing facts with respect to such stock ownership or income.
c Effect on withholding in case of dividends of address in Netherlands. For the purposes of withholding of the tax in the case of dividends, every nonresident alien including a nonresident alien in dividual, fiduciary or partnership whose address is in the Netherlands shall be deemed by United States withholding agents to be a resident of the Netherlands not engaged in trade or business in the United States through a permanent establishment therein and every Corpora tion whose address is in the Netherlands shall be deemed by such withholding agents to be a Netherlands corporation not so engaged in trade or business in the United States.
d Rate of withholding. On and after January 1, 1949, withholding in the case of dividends paid to nonresident aliens including a nonresident alien individual, .fiduciary1 or partnership, and to foreign corporations, whose ad dresses are in the Netherlands, shall except 1 in any case in which, prior to the date of payment of such divi dend, the Commissioner of Internal Rev enue has notified the paying corporation that such dividend falls within the pro viso of Article VII 1 of the convention, and 2 in any case in which the Com-
missioner notifies the withholding agent that the reduced rate shall not apply, be at the rate of 15 percent.
The preceding provisionsrelative to residents of the Netherlands and to Neth erlands corporations are based upon the assumption that the payee of the divi___dend is the actual owner of the capital stock from which the dividend is derived and consequently is the person liable to the tax upon such dividend. As to action by the recipient who is not the owner of the dividend, see 7.807.

FEDERAL REGISTER

1035

8 7.802 Interest a General.
In not including bonds secured by real terest other than interest falling within property, the .nonresident alien who is the scope of paragraph c of this section a resident of the Netherlands, or the and other than interest from mortgage Netherlands corporation shall file Form notes not including bonds secured by 1001A-N, in duplicate, with the with real property, whether on bonds, securi holding agent in the United States.
ties, notes, debentures, or any other form Such form shall be signed by theowner of indebtedness including interest on of the income, trustee, or agent, and obligations of the United States and on shall show the name and address of the obligations of instrumentalities of the obligor and the name and address of the United States received on or after Janu owner of such interest. Such form shall ary 1, 1947, from sources within the contain a statement that the owner is a United States by 1 a nonresident alien resident of the Netherlands, or is a including a nonresident alien individual, Netherlands corporation, not having a fiduciary , and partnership who is a resi permanent establishment in the United dent of the Netherlands, or 2 a Nether states.
lands corporation, is exempt from United Form 1001A-N must be filed for each States tax under the provisions of Article three-calendar-year period and the first Vni of the convention if such alien or such form filed by the taxpayer with any corporation at no timeduring the taxable withholding agent should be filed not year in which such interest is so received later than 20 days preceding the date of had a permanent establishment in the the first payment of income in such pe United States. Such interest is, there riod. If the taxpayer files such form with fore, not subject to the withholding pro the withholding agent in the calendar visions of the Internal Revenue Code.
year 1948 or in any subsequent calendar b Exemption from withholding. To year no additional Form 1001A-N need obviate withholding at the source in the be filed prior to the end of the two cal case of coupon bond interest, the non endar years immediately following the resident alien resident in the Netherlands calendar year in which such form is so or the Netherlands corporation shall sub filed unless the Commissioner notifies mit Form 1001-N, in duplicate, to the the withholding agent that an additional paying agent with each presentation of Form 1001A-N must be filed by the tax interest coupons. Such form shall be payer at any earlier date. The duplicate signed by the owner of the interest, trus of Form 1001A-N should be immediately tee or agent, and shall show the name forwarded by the withholding agent to and address of the obligor, and the name the Commissioner of Internal Revenue, and address of the owner of such inter Records Division, Washington 25, D. C.
est and the amount of such interest.
In the aSe of interest paid on or after Such form shall contain a statement that January 1, 1947, by a Netherlands cor the owner is a resident of the Nether poration no withholding of United States lands or a Netherlands corporation and tax is required irrespective of the citizen that such owner has no permanent estab ship or residence of the owner of the in lishment in the United States.
terest see Article XII of the convention.
The exemption from United States tax c Exemption not applicable to inter contemplated by Article VIII of the con est paid by subsidiary corporation to its vention, insofar as it concerns coupon parent corporation. Article VIII 1 of bond interest, is an exemption appli the convention provides in part that the cable only to the owner of such interest.
exemption from United States tax of in The person presenting such coupon or terest shall not apply to interest paid by a on whose behalf it is presefited shall, for domestic corporation to a Netherlands the purpose of the exemption, be deemed corporation if such foreign corporation to be the owner of the interest only if controls, directly or indirectly, more than he is, at the time the coupon is presented 50 percent of the voting power of all for payment, the owner of the bond from classes of stock of such domestic corpora which the coupon has been detached.
tion. The exemption provisions of Ar If the person presenting the coupon is ticle VIII 1 of the convention have, not the owner of the bond, Form 1001, therefore, no application to such interest.
and not Form 1001-N, shall be executed. In any case in which 1 a Netherlands The original and duplicate ownership corporation derives interest from a do certificates, Form 1001-N, must be for mestic corporation, and 2 the relation warded to the Commissioner with the ship existing between the Netherlands quarterly return, Form 1012, as providd corporation and the domestic corporation in existing regulations with respect to is such as to render uncertain whether Form 1001. See 29.143-7 of this chap the exemption applies to such interest, ter Regulations 111. Form 1001-N neither Form 1001-N nor Form 1001A-N
need not be listed on Form 1012.
should be executed by the Netherlands In the case of interest coupons pre corporation. In such case a statement of sented in the Netherlands by a nonresi the facts should be filed with the Com dent alien who is not a resident of the missioner of Internal Revenue, Wash Netherlands, or by a foreign corporation ington 25, D. C. As soon as practicable other than a Netherlands corporation after such statement is filed the Commis ownership certificates, Form 1001, shall sioner of Internal Revenue will determine be filed as provided in existing regula whether the interest involved is entitled tions without reference to the provisions to exemption under the provisions of Ar of the convention. See 29.143-4 of this ticle VIII 1 of the convention, and will chapter Regulations 111.
notify such Netherlands corporation To avoid withholding at the source whether the exemption provided in Ar in the case of interest, other than inter ticle VIII 1 of the convention applies est payable by means of coupons and in such case. If in such case the Com other than interest from mortgage notes missioner of Internal Revenue deter-