§ 1.1441-6T - Claim of reduced withholding under an income tax treaty (temporary).

§ 1.1441-6T Claim of reduced withholding under an income tax treaty (temporary).

(a) through (b)

(1) introductory text [Reserved]. For further guidance, see § 1.1441-6(a) through (b)(1) introductory text.

(i) Identification of limitation on benefits provisions. In conjunction with the representation that the beneficial owner meets the limitation on benefits provision of the applicable treaty, if any, required by paragraph (b)(1) of this section, a beneficial owner withholding certificate must also identify the specific limitation on benefits provision of the article (if any, or a similar provision) of the treaty upon which the beneficial owner relies to claim the treaty benefit. A withholding agent may rely on the beneficial owner's claim regarding its reliance on a specific limitation on benefits provision absent actual knowledge that such claim is unreliable or incorrect.

(ii) Reason to know based on existence of treaty. For purposes of this paragraph (b)(1), a withholding agent's reason to know that a beneficial owner's claim to a reduced rate of withholding under an income tax treaty is unreliable or incorrect includes a circumstance where the beneficial owner is claiming benefits under an income tax treaty that does not exist or is not in force. A withholding agent may determine whether a tax treaty is in existence and is in force by checking the list maintained on the IRS Web site at https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z (or any replacement page on the IRS Web site) or in the State Department's annual Treaties in Force publication.

(b) (2)(i) through (iv) Example 3 [Reserved]. For further guidance, see § 1.1441-6(b)(2)(i) through (b)(2)(iv) Example 3.

Example 4.

(i) Facts. Entity E is a business organization formed under the laws of country Y. Country Y has an income tax treaty with the United States that contains a limitation on benefits provision. E receives U.S. source royalties from withholding agent W. E furnishes a beneficial owner withholding certificate to W claiming a reduced rate of withholding under the U.S.-Y tax treaty. However, E's beneficial owner withholding certificate does not specifically identify the limitation on benefits provision that E satisfies.

(ii) Analysis. Because E's withholding certificate does not specifically identify the limitation on benefits provision under the U.S.-Y tax treaty that E satisfies as required by paragraph (b)(1)(i) of this section, W cannot rely on E's withholding certificate to apply the reduced rate of withholding claimed by E.

(c) introductory text through (c)(4) [Reserved]. For further guidance, see § 1.1441-6(c) through (c)(4).

(5) Statements regarding entitlement to treaty benefits - (i) Statement regarding conditions under a limitation on benefits provision. In addition to the documentary evidence described in paragraph (c)(4)(ii) of this section, a taxpayer that is not an individual must provide a statement that it meets one or more of the conditions set forth in the limitation on benefits article (if any, or in a similar provision) contained in the applicable tax treaty and must identify the specific limitation on benefits provision of the article (if any, or a similar provision) of the treaty upon which the taxpayer relies to claim the treaty benefit.

(c) (5)(ii) through (i)(2) [Reserved]. For further guidance, see § 1.1441-6(c)(5)(ii) through (i)

(2) .

(3) Effective/applicability date. This section applies on January 6, 2017.

(j) Expiration date. The applicability of this section expires on December 30, 2019.

[T.D. 9808, 82 FR 2095, Jan. 6, 2017]