26 C.F.R. § 1.1441-0   Outline of regulation provisions for section 1441.


Title 26 - Internal Revenue


Title 26: Internal Revenue
PART 1—INCOME TAXES
Withholding of Tax on Nonresident Aliens and Foreign Corporations and Tax-Free Covenant Bonds

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§ 1.1441-0   Outline of regulation provisions for section 1441.

This section lists captions contained in §§1.1441–1 through 1.1441–9.

§1.1441–1  Requirement for the deduction and withholding of tax on payments to foreign persons.

(a) Purpose and scope.

(b) General rules of withholding.

(1) Requirement to withhold on payments to foreign persons.

(2) Determination of payee and payee's status.

(i) In general.

(ii) Payments to a U.S. agent of a foreign person.

(iii) Payments to wholly-owned entities.

(A) Foreign-owned domestic entity.

(B) Foreign entity.

(iv) Payments to a U.S. branch of certain foreign banks or foreign insurance companies.

(A) U.S. branch treated as a U.S. person in certain cases.

(B) Consequences to the withholding agent.

(C) Consequences to the U.S. branch.

(D) Definition of payment to a U.S. branch.

(E) Payments to other U.S. branches.

(v) Payments to a foreign intermediary.

(A) Payments treated as made to persons for whom the intermediary collects the payment.

(B) Payments treated as made to foreign intermediary.

(vi) Other payees.

(vii) Rules for reliably associating a payment with a withholding certificate or other appropriate documentation.

(A) Generally.

(B) Special rules applicable to a withholding certificate from a nonqualified intermediary or flow-through entity.

(C) Special rules applicable to a withholding certificate provided by a qualified intermediary that does not assume primary withholding responsibility.

(D) Special rules applicable to a withholding certificate provided by a qualified intermediary that assumes primary withholding responsibility under chapter 3 of the Internal Revenue Code.

(E) Special rules applicable to a withholding certificate provided by a qualified intermediary that assumes primary Form 1099 reporting and backup withholding responsibility but not primary withholding under chapter 3.

(F) Special rules applicable to a withholding certificate provided by a qualified intermediary that assumes primary withholding responsibility under chapter 3 and primary Form 1099 reporting and backup withholding responsibility and a withholding certificate provided by a withholding foreign partnership.

(3) Presumptions regarding payee's status in the absence of documentation.

(i) General rules.

(ii) Presumptions of classification as individual, corporation, partnership, etc.

(A) In general.

(B) No documentation provided.

(C) Documentary evidence furnished for offshore account.

(iii) Presumption of U.S. or foreign status.

(A) Payments to exempt recipients.

(B) Scholarships and grants.

(C) Pensions, annuities, etc.

(D) Certain payments to offshore accounts.

(iv) Grace period.

(v) Special rules applicable to payments to foreign intermediaries.

(A) Reliance on claim of status as foreign intermediary.

(B) Beneficial owner documentation or allocation information is lacking or unreliable.

(C) Information regarding allocation of payment is lacking or unreliable.

(D) Certification that the foreign intermediary has furnished documentation for all of the persons to whom the intermediary certificate relates is lacking or unreliable.

(vi) U.S. branches.

(vii) Joint payees.

(A) In general.

(B) Special rule for offshore accounts.

(viii) Rebuttal of presumptions.

(ix) Effect of reliance on presumptions and of actual knowledge or reason to know otherwise.

(A) General rule.

(B) Actual knowledge or reason to know that amount of withholding is greater than is required under the presumptions or that reporting of the payment is required.

(x) Examples.

(4) List of exemptions from, or reduced rates of, withholding under chapter 3 of the Code.

(5) Establishing foreign status under applicable provisions of chapter 61 of the Code.

(6) Rules of withholding for payments by a foreign intermediary or certain U.S. branches.

(i) In general.

(ii) Example.

(7) Liability for failure to obtain documentation timely or to act in accordance with applicable presumptions.

(i) General rule.

(ii) Proof that tax liability has been satisfied.

(iii) Liability for interest and penalties.

(iv) Special effective date.

(v) Examples.

(8) Adjustments, refunds, or credits of overwithheld amounts.

(9) Payments to joint owners.

(c) Definitions.

(1) Withholding.

(2) Foreign and U.S. person.

(3) Individual.

(i) Alien individual.

(ii) Nonresident alien individual.

(4) Certain foreign corporations.

(5) Financial institution and foreign financial institution.

(6) Beneficial owner.

(i) General rule.

(ii) Special rules.

(A) General rule.

(B) Foreign partnerships.

(C) Foreign simple trusts and foreign grantor trusts.

(D) Other foreign trusts and foreign estates.

(7) Withholding agent.

(8) Person.

(9) Source of income.

(10) Chapter 3 of the Code.

(11) Reduced rate.

(12) Payee.

(13) Intermediary.

(14) Nonqualified intermediary.

(15) Qualified intermediary.

(16) Withholding certificate.

(17) Documentary evidence; other appropriate documentation.

(18) Documentation.

(19) Payor.

(20) Exempt recipient.

(21) Non-exempt recipient.

(22) Reportable amounts.

(23) Flow-through entity.

(24) Foreign simple trust.

(25) Foreign complex trust.

(26) Foreign grantor trust.

(27) Partnership.

(28) Nonwithholding foreign partnership.

(29) Withholding foreign partnership.

(d) Beneficial owner's or payee's claim of U.S. status.

(1) In general.

(2) Payments for which a Form W–9 is otherwise required.

(3) Payments for which a Form W–9 is not otherwise required.

(4) When a payment to an intermediary or flow-through entity may be treated as made to a U.S. payee.

(e) Beneficial owner's claim of foreign status.

(1) Withholding agent's reliance.

(i) In general.

(ii) Payments that a withholding agent may treat as made to a foreign person that is a beneficial owner.

(A) General rule.

(B) Additional requirements.

(2) Beneficial owner withholding certificate.

(i) In general.

(ii) Requirements for validity of certificate.

(3) Intermediary, flow-through, or U.S. branch withholding certificate.

(i) In general.

(ii) Intermediary withholding certificate from a qualified intermediary.

(iii) Intermediary withholding certificate from a nonqualified intermediary.

(iv) Withholding statement provided by nonqualified Intermediary.

(A) In general.

(B) General requirements.

(C) Content of withholding statement.

(D) Alternative procedures.

(E) Notice procedures.

(v) Withholding certificate from certain U.S. branches.

(vi) Reportable amounts.

(4) Applicable rules.

(i) Who may sign the certificate.

(ii) Period of validity.

(A) Three-year period.

(B) Indefinite validity period.

(C) Withholding certificate for effectively connected income.

(D) Change in circumstances.

(iii) Retention of withholding certificate.

(iv) Electronic transmission of information.

(A) In general.

(B) Requirements.

(C) Special requirements for transmission of Forms W–8 by an intermediary. [Reserved]

(v) Electronic confirmation of taxpayer identifying number on withholding certificate.

(vi) Acceptable substitute form.

(vii) Requirement of taxpayer identifying number.

(viii) Reliance rules.

(A) Classification.

(B) Status of payee as an intermediary or as a person acting for its own account.

(ix) Certificates to be furnished for each account unless exception applies.

(A) Coordinated account information system in effect.

(B) Family of mutual funds.

(C) Special rule for brokers.

(5) Qualified intermediaries.

(i) General rule.

(ii) Definition of qualified intermediary.

(iii) Withholding agreement.

(A) In general.

(B) Terms of the withholding agreement.

(iv) Assignment of primary withholding responsibility.

(v) Withholding statement.

(A) General rule.

(B) Content of withholding statement.

(C) Withholding rate pools.

(f) Effective date.

(1) In general.

(2) Transition rules.

(i) Special rules for existing documentation.

(ii) Lack of documentation for past years.

§1.1441–2  Amounts subject to withholding.

(a) In general.

(b) Fixed or determinable annual or periodical income.

(1) In general.

(i) Definition.

(ii) Manner of payment.

(iii) Determinability of amount.

(2) Exceptions.

(3) Original issue discount.

(i) Amount subject to tax.

(ii) Amounts subject to withholding.

(4) Securities lending transactions and equivalent transactions.

(5) REMIC residual interests.

(c) Other income subject to withholding.

(d) Exceptions to withholding where no money or property is paid or lack of knowledge.

(1) General rule.

(2) Cancellation of debt.

(3) Satisfaction of liability following underwithholding by withholding agent.

(4) Withholding exemption inapplicable.

(e) Payment.

(1) General rule.

(2) Income allocated under section 482.

(3) Blocked income.

(4) Special rules for dividends.

(5) Certain interest accrued by a foreign corporation.

(6) Payments other than in U.S. dollars.

(f) Effective date.

§1.1441–2T  Amounts subject to withholding.

(a) through (b)(4) [Reserved]

(5) REMIC residual interests.

(c) through (d)(3) [Reserved]

(d)(4) Withholding exemption inapplicable.

(e) [Reserved]

(f) Effective date.

§1.1441–3  Determination of amounts to be withheld.

(a) Withholding on gross amount.

(b) Withholding on payments on certain obligations.

(1) Withholding at time of payment of interest.

(2) No withholding between interest payment dates.

(i) In general.

(ii) Anti-abuse rule.

(c) Corporate distributions.

(1) General rule.

(2) Exception to withholding on distributions.

(i) In general.

(ii) Reasonable estimate of accumulated and current earnings and profits on the date of payment.

(A) General rule.

(B) Procedures in case of underwithholding.

(C) Reliance by intermediary on reasonable estimate.

(D) Example.

(3) Special rules in the case of distributions from a regulated investment company.

(i) General rule

(ii) Reliance by intermediary on reasonable estimate.

(4) Coordination with withholding under section 1445.

(i) In general.

(A) Withholding under section 1441.

(B) Withholding under both sections 1441 and 1445.

(C) Coordination with REIT withholding.

(ii) Intermediary reliance rule.

(d) Withholding on payments that include an undetermined amount of income.

(1) In general.

(2) Withholding on certain gains.

(e) Payments other than in U.S. dollars.

(1) In general.

(2) Payments in foreign currency.

(f) Tax liability of beneficial owner satisfied by withholding agent.

(1) General rule.

(2) Example.

(g) Conduit financing arrangements

(h) Effective date.

§1.1441–4  Exemptions from withholding for certain effectively connected income and other amounts.

(a) Certain income connected with a U.S. trade or business.

(1) In general.

(2) Withholding agent's reliance on a claim of effectively connected income.

(i) In general.

(ii) Special rules for U.S. branches of foreign persons.

(A) U.S. branches of certain foreign banks or foreign insurance companies.

(B) Other U.S. branches.

(3) Income on notional principal contracts.

(i) General rule.

(ii) Exception for certain payments.

(b) Compensation for personal services of an individual.

(1) Exemption from withholding.

(2) Manner of obtaining withholding exemption under tax treaty.

(i) In general.

(ii) Withholding certificate claiming withholding exemption.

(iii) Review by withholding agent.

(iv) Acceptance by withholding agent.

(v) Copies of Form 8233.

(3) Withholding agreements.

(4) Final payments exemption.

(i) General rule.

(ii) Final payment of compensation for personal services.

(iii) Manner of applying for final payment exemption.

(iv) Letter to withholding agent.

(5) Requirement of return.

(6) Personal exemption.

(i) In general.

(ii) Multiple exemptions.

(iii) Special rule where both certain scholarship and compensation income are received.

(c) Special rules for scholarship and fellowship income.

(1) In general.

(2) Alternate withholding election.

(d) Annuities received under qualified plans.

(e) Per diem of certain alien trainees.

(f) Failure to receive withholding certificates timely or to act in accordance with applicable presumptions.

(g) Effective date.

(1) General rule.

(2) Transition rules.

§1.1441–5  Withholding on payments to partnerships, trusts, and estates.

(a) In general.

(b) Rules applicable to U.S. partnerships, trusts, and estates.

(1) Payments to U.S. partnerships, trusts, and estates.

(2) Withholding by U.S. payees.

(i) U.S. partnerships.

(A) In general.

(B) Effectively connected income of partners.

(ii) U.S. simple trusts.

(iii) U.S. complex trusts and U.S. estates.

(iv) U.S. grantor trusts.

(v) Subsequent distribution.

(c) Foreign partnerships.

(1) Determination of payee.

(i) Payments treated as made to partners.

(ii) Payments treated as made to the partnership.

(iii) Rules for reliably associating a payment with documentation.

(iv) Examples.

(2) Withholding foreign partnerships.

(i) Reliance on claim of withholding foreign partnership status.

(ii) Withholding agreement.

(iii) Withholding responsibility.

(iv) Withholding certificate from a withholding foreign partnership.

(3) Nonwithholding foreign partnerships.

(i) Reliance on claim of foreign partnership status.

(ii) Reliance on claim of reduced withholding by a partnership for its partners.

(iii) Withholding certificate from a nonwithholding foreign partnership.

(iv) Withholding statement provided by nonwithholding foreign partnership.

(v) Withholding and reporting by a foreign partnership.

(d) Presumption rules.

(1) In general.

(2) Determination of partnership's status as domestic or foreign in the absence of documentation.

(3) Determination of partners' status in the absence of certain documentation.

(4) Determination by a withholding foreign partnership of the status of its partners.

(e) Foreign trusts and estates.

(1) In general.

(2) Payments to foreign complex trusts and estates.

(3) Payees of payments to foreign simple trusts and foreign grantor trusts.

(i) Payments for which beneficiaries and owners are payees.

(ii) Payments for which trust is payee.

(4) Reliance on claim of foreign complex trust or foreign estate status.

(5) Foreign simple trust and foreign grantor trust.

(i) Reliance on claim of foreign simple trust or foreign grantor trust status.

(ii) Reliance on claim of reduced withholding by a foreign simple trust or foreign grantor trust for its beneficiaries or owners.

(iii) Withholding certificate from foreign simple trust or foreign grantor trust.

(iv) Withholding statement provided by a foreign simple trust or foreign grantor trust.

(v) Withholding foreign trusts.

(6) Presumption rules.

(i) In general.

(ii) Determination of status as U.S. or foreign trust or estate in the absence of documentation.

(iii) Determination of beneficiary or owner's status in the absence of certain documentation.

(f) Failure to receive withholding certificate timely or to act in accordance with applicable presumptions.

(g) Effective date.

(1) General rule.

(2) Transition rules.

§1.1441–6  Claim of reduced withholding under an income tax treaty.

(a) In general.

(b) Reliance on claim of reduced withholding under an income tax treaty.

(1) In general.

(2) Payment to fiscally transparent entity.

(i) In general.

(ii) Certification by qualified intermediary.

(iii) Dual treatment.

(iv) Examples.

(3) Certified TIN.

(4) Claim of benefits under an income tax treaty by a U.S. person.

(c) Exemption from requirement to furnish a taxpayer identifying number and special documentary evidence rules for certain income.

(1) In general.

(2) Income to which special rules apply.

(3) Certificate of residence.

(4) Documentary evidence establishing residence in the treaty country.

(i) Individuals.

(ii) Persons other than individuals.

(5) Statements regarding entitlement to treaty benefits.

(i) Statement regarding conditions under a limitation on benefits provision.

(ii) Statement regarding whether the taxpayer derives the income.

(d) Joint owners.

(e) Competent authority.

(f) Failure to receive withholding certificate timely.

(g) Special taxpayer identifying number rule for certain foreign individuals claiming treaty benefits.

(1) General rule.

(2) Special rule.

(3) Requirement that an ITIN be requested during the first business day following payment.

(4) Definition of unexpected payment.

(5) Examples.

(h) Effective dates.

(1) General rule.

(2) Transition rules.

§1.1441–7  General provisions relating to withholding agents.

(a) Withholding agent defined.

(1) In general.

(2) Examples.

(b) Standards of knowledge.

(1) In general.

(2) Reason to know.

(3) Financial institutions—limits on reason to know.

(4) Rules applicable to withholding certificates.

(i) In general.

(ii) Examples.

(5) Withholding certificate—establishment of foreign status.

(6) Withholding certificate—claim of reduced rate of withholding under treaty.

(7) Documentary evidence.

(8) Documentary evidence—establishment of foreign status.

(9) Documentary evidence—claim of reduced rate of withholding under treaty.

(10) Limits on reason to know—indirect account holders.

(11) Additional guidance.

(c) Authorized agent.

(1) In general.

(2) Authorized foreign agent.

(3) Notification.

(4) Liability of U.S. withholding agent.

(5) Filing of returns.

(d) United States obligations.

(e) Assumed obligations.

(f) Conduit financing arrangements.

(g) Effective date.

§1.1441–8  Exemption from withholding for payments to foreign governments, international organizations, foreign central banks of issue, and the Bank for International Settlements.

(a) Foreign governments.

(b) Reliance on claim of exemption by foreign government.

(c) Income of a foreign central bank of issue or the Bank for International

Settlements.

(1) Certain interest income.

(2) Bankers' acceptances.

(d) Exemption for payments to international organizations.

(e) Failure to receive withholding certificate timely and other applicable procedures.

(f) Effective date.

(1) In general.

(2) Transition rules.

§1.1441–9  Exemption from withholding on exempt income of a foreign tax-exempt organization, including foreign private foundations.

(a) Exemption from withholding for exempt income.

(b) Reliance on foreign organization's claim of exemption from withholding.

(1) General rule.

(2) Withholding certificate.

(3) Presumptions in the absence of documentation.

(4) Reason to know.

(c) Failure to receive withholding certificate timely and other applicable procedures.

(d) Effective date.

(1) In general.

(2) Transition rules.

[T.D. 8734, 62 FR 53421, Oct. 14, 1997, as amended by T.D. 8881, 66 FR 32168, May 22, 2000; T.D. 9023, 67 FR 70312, Nov. 22, 2002; T.D. 9272, 71 FR 43366, Aug. 1, 2006]

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