§ 514.28 - Release of excess tax withheld at source.

(a) Amounts to be released—(1) Tax withheld from dividends—(i) Dividends subject to 15-percent rate. If U.S. tax has been withheld on or after August 11, 1968, at a rate in excess of 15 percent from dividends described in § 514.21(a)(3)(i) received by a nonresident alien individual who is a resident of France or French corporation or person resident in France for French tax purposes whose address at the time of payment was in France, the withholding agent shall release and par over to the person from whom the tax was withheld an amount which is equal to the difference between the tax so withheld and the tax required to be withheld pursuant to § 514.21(b)(1).

(ii) Dividends subject to 5-percent rate. If U.S. tax has been withheld at a rate in excess of 5 percent on or after August 11, 1968, from dividends which qualify for the reduced rate of 5 percent under § 514.21(a)(3)(ii), the withholding agent shall, if so authorized in accordance with § 514.21(a)(3)(iv) release and pay over to the corporation from which the tax was withheld an amount which is equal to the difference between the tax so withheld and the tax required to be withheld pursuant to § 514.21(b)(2)(i).

(2) Tax withheld from coupon bond interest—(i) Substitute ownership certificate. If U.S. tax has been withheld at a rate in excess of 10 percent on or after August 11, 1968, from coupon bond interest described in § 514.23(c)(1), the owner of the interest shall furnish the withholding agent a Form 1001-F clearly marked “Substitute” and executed in accordance with § 514.23(c). Upon receipt of such substitute Form 1001-F the withholding agent shall release and pay over to the person from whom the tax was withheld an amount which is equal to the difference between the tax so withheld and the tax required to be withheld pursuant to § 514.23(b)(1).

(ii) Filing and disposition of substitute ownership certificate. One substitute Form 1001-F 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 or 1001-F previously filed by the owner of the interest in the calendar year in which the excess tax was withheld and with respect to which the excess is released. Such forms shall be disposed of in accordance with the rules of § 514.23(c)(1)(iii).

(3) Tax withheld from other income covered by convention. If the owner of the other income furnishes to the withholding agent the letter of notification prescribed in § 514.24(a)(3) or (b)(4), § 514.25(b)(1), or the authorization for release of tax prescribed in § 514.26(a)(2), and U.S. tax has been withheld at a rate in excess of the rate provided in the convention with respect to payments of income to which such letter of authorization is applicable, made on or after August 11, 1968, or received in the taxable year of the owner beginning after December 31, 1966 (whichever is applicable), the withholding agent shall release and pay to the person from whom the tax was withheld an amount which is equal to the tax so withheld from such income, or to the difference between the tax so withheld and the tax required to be withheld, as the case may be.

(b) Amounts not to be released. The provisions of this section do not apply to any excess tax withheld at the source subsequent to the due date for filing Form 1042.

(c) Statutory rate. As used in this paragraph, the term “statutory rate” means the rate of tax (30 percent as of the date of approval of this Treasury decision) prescribed by subchapter A of chapter 3 (relating to the withholding of tax on nonresident alien individuals and foreign corporations) of the Internal Revenue Code as though the convention has not come into effect.